Tax Type
Retail Sales and Use Tax
Description
Lodging; Campground facilities
Topic
Taxability of Persons and Transactions
Date Issued
10-22-1996
October 22, 1996
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear**************
This will reply to your letter in which you seek correction of a sales and use tax assessment to *********(the Taxpayer) for the period July 1992 through July 1995.
FACTS
The Taxpayer operates two membership campground facilities in Virginia. Members may access the campgrounds with their own recreational vehicles or they may rent a recreational vehicle owned by the Taxpayer. The fully furnished recreational vehicles are rented to the members for a period generally less than a week. At issue is the tax assessed on the purchase of furniture, air conditioners, microwaves, carpet, and other tangible personal property used to furnish these recreational vehicles. The Taxpayer maintains that the purchase of tangible personal property to furnish the recreational vehicles is entitled to the resale exemption as property used for taxable lease or rental.
DETERMINATION
Code of Virginia § 58.1-603 imposes the tax on the "gross proceeds derived from the sale or charges for rooms, lodgings or accommodations furnished to transients...." § 58.1-602 defines "retail sale" to mean a sale to any person for any purpose other than resale and specifically includes the sale or charges for rooms, lodgings, or accommodations furnished to transients.
The department interprets these statutes through Virginia Regulation (VR) 630-10-48 which indicates that "the tax applies to the sale or charge for any... lodgings or accommodations furnished to transients by... camping grounds...." The regulation further indicates that "purchases of furniture, linens, carpeting, drapes, and other tangible personal property by such businesses are taxable at the time of purchase."
Further, the courts have held that a hotel's purchase of televisions, beds and other furnishings are taxable (and not for resale) since charges paid by hotel guests are for lodging and accommodations and not for specific items which are in the room. Therefore, the tax paid by hotels for furnishings and the tax charged by hotels for accommodations do not constitute double taxation, but rather two taxes levied on separate and distinct transactions. See the enclosed Telerent Leasing Corporation v. High, 8 N.C. App. 179, 174 S.E.2d 11 (1970).
Based on the above, the Taxpayer is engaged in the rental of transient accommodations as provided under VR 630-10-48. As such, the Taxpayer is the user or consumer of any tangible personal property furnished or installed in recreational vehicles rented to transients. Accordingly, I find that the auditor correctly assessed the tax in this case. The Taxpayer has paid the assessment in full and no refund will be issued.
It is my understanding from a member of my staff that the Department of Motor Vehicles (DMV) will contact the Taxpayer regarding the issue of licensing and titling of the Taxpayer's recreational vehicles. If you have any questions regarding this letter, please contact ***** in my Office of Tax Policy at *************
Sincerely,
Danny M. Payne
Tax Commissioner
OTP 10739T
Rulings of the Tax Commissioner