November
5, 1991 Response from Tax Commission
September
23, 1991 XXXXX of XXXXX
XXXXX
Manager
of Contracts
Re:XXXXX
Lodging
Dear
Ms. XXXXX:
This
letter is in response to your recent request for a Tax Commission ruling on
whether the governmental exemption from sales and transient room taxes are
applicable for lodging of XXXXX employees when handled through XXXXX.
The
Tax Commission policy is to refer such requests to the division most qualified
to analyze the request and make recommendations concerning it. As such, your
request was referred to the Tax Commission's Auditing Division for their
analysis and recommendations. The division's recommendations are as follows:
1. It is acknowledged that XXXXX is exempt from
state and local taxation under federal law.
2.
In order for the exemption to apply, payment must be from funds of XXXXX. An
XXXXX check must be payable to the hotel. Funds cannot be channeled through a
contractor. A copy of Sales Tax Rule R865-19-91S is attached.
3.
Lodging accommodations are exempt when there is a continuous stay of 30 days or
longer. The same room or rooms must be occupied by the guest for the entire
period. The rooms must actually be blocked off and not available for use by
other guests. Merely guaranteeing to have a room available is not sufficient.
All employees of XXXXX would be considered a single guest.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendations. Obviously, if there are deviations from these
facts, this opinion may be negated.
If
you do not agree with this determination, you may appeal to the Tax Commission
for a formal hearing. The results of that hearing would constitute a
declaratory judgment and be appealable to the Utah State Supreme Court. A
Notice of Appeal Rights and a copy of the Utah Taxpayer's Bill of Rights are
attached.
For
the Commission,
Joe
B. Pacheco
Commissioner
XXXXX,
Director
Legal
Affairs/Appeals Department
Utah
State Tax Commission
160
East Third South
Salt
Lake City, Ut 84134
Dear
Mr. XXXXX:
XXXXX
has been retained by XXXXX to handle all employee lodging. We are currently in
the process of contracting with the XXXXX of Salt Lake City, Utah, on XXXXX's
behalf and at XXXXX's direction.
XXXXX
is an agency of the United states government and is therefore tax exempt.
However, the XXXXX has informed us that you are disputing their tax exemption.
The
contract between XXXXX and XXXXX dictates that the lodging bills are to be sent
to XXXXX c/o XXXXX. XXXXX is not buying
and selling rooms. We are acting solely
at the direction of XXXXX. In addition, XXXXX pays the hotel invoices only
after they have been approved and paid by XXXXX, i.e. XXXXX is acting solely as
a fiduciary in the bill paying process.
I
am enclosing a copy of the Exemption Certificate for XXXXX issued by your
office. According to the "Sales Tax Packet" provided us by the Utah
State Tax Commission (TC-75 Rev. 1/91), Item B under the category "What Is
Exempt" calls for a "copy of the purchase order, payment voucher or
other evidence that the sales were to a government agency". XXXXX
employees are issued lodging vouchers by XXXXX and are required to present this
voucher upon arrival at the property, attach their signature and provide their
social security number. These vouchers become part of the documentation
required for payment of hotel invoices and would surely constitute "other
evidence". Additionally, Item I under the same paragraph requires that
"room and trailer space rentals on a permanent basis (30 days or
more)" qualify for the tax exemption.
XXXXX employees (not XXXXX)
are consistently occupying these rooms.
Since
XXXXX has fulfilled all obligations as dictated by your state laws, we request
that you reconsider your direction to the XXXXX of Salt Lake City and
acknowledge XXXXX's tax exempt status as a government agency. We would
sincerely appreciate your prompt attention to this matter.
Sincerely,
XXXXX
Manager
of Contracts