November
27, 1991 Response from Tax Commission
October
30, 1991 Letter from XXXXX of XXXXX
XXXXX
Re:
Restaurant Tax
Dear
Mr. XXXXX:
This
letter is in response to your recent request for a Tax Commission ruling on
whether XXXXX hospital cafeterias are required to collect the 1%
"restaurant" tax.
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 recommendation. The division's recommendation is as follows:
The
Tax Commission issued Tax Bulletin 8-91 and Local Tax Rule R865-12-17L to
define a "restaurant" for the purpose of the new Tourist, Recreation,
Cultural and Convention Facilities tax. Under the Tax Commission's
"Primary Business" definition, vendors engaged in the operation of
multiple lines of business from one outlet .... will" likely be subject to
this tax. XXXXX hospitals provide health care services, sell pharmaceuticals
and sell food and beverages for immediate consumption. XXXXX's cafeterias are required to collect
the tourism tax.
Based
upon the facts presented in your letter, we are in agreement with the Auditing
Division's recommendation. Obviously, if there are deviations from these facts,
this opinion may be negated. XXXXX has
previously asked for a verbal opinion on this issue and were advised by Tax
Commission staff that XXXXX was not required to collect the 1% tax. That verbal opinion was incorrect. The
determination will, therefore, have prospective application.
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 judgement 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
Mr.
XXXXX
Utah
State Tax Commission
Heber
M. Wells Building
160
East 300 South
Salt
Lake City, Ut 84134
Re: Liability for Utah "Restaurant
Tax"
Dear
XXXXX:
As
we discussed in our telephone conversation on October 29, 1991 the purpose of
this letter is confirm that XXXXX is not liable for the 1% "restaurant
tax" on sales of meals and food items in its hospital cafeterias.
As
we discussed, XXXXX operates cafeterias in most of its hospitals. Access to the hospital cafeterias is not
restricted in any way. As a result,
XXXXX believes that it is appropriate to collect and remit and does collect and
remits sales tax on purchases of meals and food items in the cafeterias.
You
have confirmed to me in our telephone conversation that notwithstanding the
liability for general sales tax, XXXXX is not liable for the additional 1%
"restaurant tax" on sales of meals and food in its cafeterias.
If
my understanding of XXXXX's liability for general sales tax and its exemption
from the "restaurant tax" is not consistent with the Tax Commission's
policy, please notify me in writing as soon as possible.
Thank
you again for your time on Tuesday.
Very
truly yours,
XXXXX