Tax Type
Retail Sales and Use Tax
Description
Food and grocery items; Tax included in menu price
Topic
Taxability of Persons and Transactions
Date Issued
08-30-1995
August 30, 1995
Re: Request for Ruling: Retail Sales and Use Tax
Dear**********
This will reply to your letter of July 28, 1995, requesting permission to include the tax in the sales price of items listed in *********** (the "Taxpayer's") menu prices.
FACTS
The Taxpayer operates a restaurant. The Taxpayer currently advertises that the tax is included in the sales price of its listed item menu prices. However, the Taxpayer had not been granted permission by the department. The Taxpayer now requests permission to include the tax in the sales price of its item menu prices.
RULING
Code of Virginia § 58.1-625 provides that a dealer is required to separately state the amount of the tax and add the tax to the sales price or charge. Virginia Regulation (VR) 630-10-24(A) further provides that "[i]dentification of the tax by a separate writing or symbol is not required provided that the amount of the tax is shown as a separate item on the record of transaction."
However, Code of Virginia § 58.1-614 (D) provides that when a dealer is able to demonstrate to the satisfaction of the Tax Commissioner that it is impractical to collect the tax in accordance with the bracket system it may be authorized to remit an amount based on a percentage of gross receipts which takes into account the inclusion of the sales tax.
Based on the circumstances outlined in your letter and under the provisions set forth in Code of Virginia § 58.1-614 (D), permission is hereby granted for the Taxpayer to include the tax in its menu item prices prospectively from July 1, 1995. This permission applies only to the retail sales and use tax. The Taxpayer will have to seek separate permission from its locality to include the local meal and beverage tax in its menu item prices.
I have enclosed P.D. 95-11 (01/19/95) for further instructions regarding price listings and the method to determine the amount of sales tax which must be remitted to the department. If you have any questions regarding this ruling, please contact*************of the department's Office of Tax Policy at*********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10084T
Rulings of the Tax Commissioner