Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 210. Retail Sales and Use Tax

23VAC10-210-690. Governments; sales to.

A. Generally. Sales to the United States, or to the Commonwealth of Virginia or its political subdivisions, are exempt from the tax if the purchases are pursuant to required official purchase orders to be paid out of public funds. Sales made without the required purchase orders and not paid for out of public funds are taxable. Sales to governmental employees for their own consumption or use in carrying out official government business are taxable.

B. Meals, lodging and other accommodations. Charges for meals, catered events, lodging, and other accommodations, such as meeting or conference rooms, are subject to the tax when paid for by the state or local government or public institutions of learning, or employees of such, regardless of whether the purchases are made pursuant to required official purchase orders. Room setup charges in connection with the rental of rooms or conference rooms are also taxable. Setup charges not in connection with room rentals are not subject to the tax.

Purchases of meals, lodging, and other accommodations, by the federal government or its employees traveling on government business are exempt from the tax provided payment for the meals, lodging, or other accommodations is made directly by the federal government pursuant to an official purchase order (e.g., by direct billing to government or use of government credit card). Only credit card purchases for which the credit of the federal government is bound and billings are sent directly to and paid by the government, are exempt from the tax. For example, I.M.P.A.C. cards which have been identified as a United States government credit card and which can be used only for making purchases for official government purposes may be used to make exempt purchases, provided the credit card bill will be paid directly by the federal government.

If an employee pays for meals and lodgings with personal funds, a personal credit card or a credit card provided by the government, the bill for which is sent directly to the employee, and will be reimbursed by the government or utilizes a travel advance, no exemption is available even though the employee may be traveling pursuant to official government orders or the credit card used has the governmental agency's name embossed thereon.

C. Federal credit unions. Sales to federally chartered credit unions are exempt from the tax (12 USC 1768).

D. Privately owned financial and other similar corporations chartered by the United States. Privately owned financial and similar corporations chartered by the United States, such as commercial banks and federal savings banks, are not instrumentalities of the United States and do not qualify for an exemption. Thus, sales and leases to these corporations are subject to the tax.

Statutory Authority

§§ 58.1-203 and 58.1-609.1(4) of the Code of Virginia.

Historical Notes

Derived from VR630-10-45 §§ 1.1-1.4; revised January 1, 1979; August 1, 1982; January 1, 1985; amended, eff. July 1, 1994.

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