SALT Report 3319 – The Department of Taxation issued Ruling 14-41 on March 20, 2014. A taxpayer that owns an amusement center sold party packages that were found taxable because food was included as part of the package. It did not matter that food sold, as part of the party package was inconsequential, since under Title 23 VAC 10-210-30 “cover chargers or minimum charges which include the provision of or the entitlement to food, drinks, or other tangible property constitute a sale of property and are subject to the tax.”
The Department did concede that conflicting guidance existed and wound up rescinded prior ruling P.D. 11-24 (2/25/11) upon which the taxpayer was relying. The Department adjusted the audit due to this conflict for part of the audit period and issued this clarifying Letter Ruling.
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