Are reimbursable expenses such as lodging, meals, mileage, car rental charges, and flights taxable when invoiced?
Service Transactions: If the purpose of the trip is merely to provide exempt services to customers on-site, charges to recover the cost of employee traveling, meals and lodging are not taxable. The Taxpayer’s employees must pay the sales tax charged by the restaurant, motel or hotel on meals or lodging charges. Taxable Retail Sales of Tangible Personal Property: If the purpose of the trip is for on-site installation of a computer system or other tangible property sold to a customer, all of the reimbursable costs incurred for an employee’s travel and accommodations are considered part of the selling price of the tangible property. As such, only those service or labor charges which are statutorily exempted from the tax may be excluded from taxation. Although a separately stated charge for the transportation or delivery of goods sold at retail to customers is exempt from the tax (see VR 630-10-107), employee travel and accommodation expenses incurred for the purpose stated above are not d
