Tax Type
Retail Sales and Use Tax
Description
Food and grocery items; Tax included in sales price.
Topic
Taxability of Persons and Transactions
Date Issued
11-19-1997
November 19, 1997
Re: Ruling Request: Retail Sales and Use Tax
Dear***************
This will reply to your letter in which you seek permission to include the sales tax in the sales price of items sold to customers by********* (the Taxpayer).
FACTS
The Taxpayer, a nonprofit organization, operates a youth camp program. In addition, the Taxpayer sells individually packaged snack food items and souvenirs at its camp store to children attending the youth camp program. The Taxpayer seeks permission from the department to include the tax in the sales price of items sold at the camp store.
RULING
Code of Virginia § 58.1-625 provides that a dealer is required to separately state the amount of the tax from the sales price or charge. Title 23 of the Virginia Administrative Code 10-210-340 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 the price of items sold at its camp store prospectively from the date of the Taxpayer's letter, October 20, 1997. The Taxpayer's price listings for and signs advertising the snack food items and souvenirs should indicate that the sales tax is included in the cost price of each item.
Based on the current sales and use tax rate of 4.5%, the Taxpayer should divide the total receipts for the period, inclusive of the sales tax collected, by a factor of 1.045 to derive the amount of sales tax which must be remitted to the department.
This ruling is applicable only to the situation presented. Any change in the factual circumstances upon which this ruling is based will invalidate this ruling. If you have any questions regarding this ruling, please contact *****at the department's Office of Tax Policy at***********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/13097T
Rulings of the Tax Commissioner