Tax Type
Retail Sales and Use Tax
Description
Nonprofit college; Lodging
Topic
Taxability of Persons and Transactions
Date Issued
03-06-1997
March 6, 1997
Re: Request for Ruling: Retail Sales and Use Tax
Dear***********************
This is in reply to your letter of February 11, 1997, in which you request a ruling on the application of sales and use tax to lodging with regard to summer semester students of the ********** (the "Taxpayer"), whose stay within Virginia is less than 90 days.
FACTS
The Taxpayer is a nonprofit educational institution. Housing costs are typically a part of the student's tuition, whether the student is attending classes during regular semester periods or during a shortened summer session. Payment for the student's housing is then made by the Taxpayer to the entity providing the accommodations. Students attending the summer session of the Taxpayer's educational offerings will be residing at a Virginia hotel for less than 90 days. The Taxpayer requests a ruling on the applicability of tax to accommodations when paid for in the manner indicated.
DETERMINATION
Code of Virginia § 58.1-603(4) imposes the sales tax on the "gross proceeds derived from the sale or charges for rooms, lodgings or accommodations furnished to transients as set out in the definition of 'retail sale' in § 58.1-602." Code of Virginia § 58.1-602 then defines the term "retail sale" and states that such sales include the charges for rooms furnished for less than ninety continuous days.
Code of Virginia § 58.1-609.5(8) exempts from the sales tax, hotel charges for any rooms or accommodations furnished to transients for more than ninety continuous days. Based on the information before me, this statutory exemption is not available as the accommodations are used for less than ninety days.
Code of Virginia § 58.1-609.4(2) provides an exemption for tangible personal property purchased by a nonprofit college or other institution of learning. Subsequent interpretations of this section have deemed that the exemption also applies to food purchases which are provided to students as a part of room, board, and tuition charges.
While the foregoing section authorizes an exemption from the tax for purchases of tangible personal property by nonprofit colleges, the exemption does not extend to taxable services. Accordingly, the tax is properly due on charges for all rooms or accommodations furnished for less than ninety continuous days, whether paid for by the student or the nonprofit college or other institution of learning.
I trust that I have responded to your concerns. If you should have any additional
questions regarding this matter, please contact*********of the department's Office of Tax Policy at *******
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12186Q
Rulings of the Tax Commissioner