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Retail Sales and Use Tax Exemptions for Nonprofit Organizations

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Retail Sales and Use Tax - Exemption Requirements:

To qualify for an exemption, a nonprofit organization must meet all of the following requirements:  (Reference: Virginia Code, 58.1-609.11)

  • The organization must be exempt from federal income taxation under Sections 501(c) (3) or 501(c) (4).  If the organization has annual gross receipts less than $5,000, a mission statement must be submitted.  For more information, visit the IRS website at www.irs.gov/eo or you may contact them at (877) 829-5500.

  • Proof that the organization is in compliance with Virginia’s law relating to organizations that solicit contributions or donations in Virginia. For additional questions, contact the Department of Agriculture and Consumer Services (VDACS) at (804) 786-1343 or visit their web page.
  • The annual administrative costs of the organization, including salaries and fundraising, must not exceed 40 percent of its annual gross revenue.
  • An organization with gross annual revenue of at least $750,000 in the previous year must provide a financial review performed by an independent Certified Public Accountant (CPA). NOTE: The Department may require an organization with gross annual revenue of at least $1million in the previous year to provide a financial audit performed by an independent CPA in lieu of a financial review.
  • The organization must provide an estimate of the total amount of tangible personal property purchased in Virginia for the preceding year, the current year, and an estimate of expected purchases for the next year.  Do not include purchases of any tangible personal property that will be furnished to a contractor performing construction, installation, repair or any other service with respect to real property.
  • If the organization is required to file a federal Form 990, 990EZ, 990PF, or 990N with the IRS, a copy must be provided to the Department.  If the organization is not required to file, the names and address of two members of the organization's Board of Directors must be provided and the location of the financial records. NOTE: All financial records must be available for inspection.

 

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Requirements for Nonprofit Churches:

Legislation passed in the 2004 Virginia General Assembly (House Bill 515 and Senate Bill 585) provides two options for nonprofit churches to request a retail sales and use tax exemption. Nonprofit churches may either continue to use the self-issued exemption certificate, Form ST-13A, or apply to the department for a tax-exempt number.

Option 1: Form ST-13A

Code of Virginia Section 58.1-609.10(16) allows nonprofit churches to use the self issued exemption certificate Form ST-13A. Churches electing this option are entitled to the sales and use tax exemption available under the law. Title 23 of the Virginia Administrative Code (VAC) 10-210-310 provides an exemplary listing of taxable and exempt purchases for nonprofit churches.

Option 2: Tax-Exempt Number

Code of Virginia Section 58.1-609.11 provides a broader exemption to nonprofit organizations and churches seeking a sales and use tax exemption. All exemption requirements under Code of Virginia 58.1-609.11 must be met to qualify.

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Apply Online for a Retail Sales and Use Tax Exemption at Nonprofit Online:

Nonprofit Online is a quick, efficient and secure way for you to apply for and print your sales and use tax certificate online. You can access Nonprofit Online to edit certain registration information as it changes, renew your expired or expiring exemption, as well as reprint lost certificates without having to contact the Department. You may also send secure e-mail messages to TAX through a secure environment.

Nonprofit Online is available to anyone requesting a sales and use tax exemption for a nonprofit organization or a nonprofit church. You will be required to create a user-id and password in order to register your organization. To qualify for an exemption, you must meet all of the exemption requirements under Code Section 58.1-609.11.

Go to Nonprofit Online (apply or search for a nonprofit organization)

Go to Nonprofit Online FAQS (for more answers)

Unable to Apply Online:

Organizations that are unable to apply online can download the Nonprofit Application and Instructions or contact the Nonprofit Exemption Team at (804) 371-4023 to request an application. Completed applications should be sent to the Department of Taxation, Nonprofit Exemption Unit, Post Office Box 27125, Richmond, Virginia 23261-7125, or Faxed to (804) 786-2645

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Helpful Resources:

Contact Information:

Virginia Department of Taxation Nonprofit Exemption Unit

(804)371-4023

http://www.tax.virginia.gov/nonprofit

 

Virginia Department of Consumer Services(VDACS)

(804)786-1343

http://www.vdacs.virginia.gov/allforms.shtml#charitable

Virginia Department of Motor Vehicles (DMV)

(804)497-7100  

http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+58.1-2403

 

Virginia State Corporation Commission (SCC)

(804)371-9967  

http://www.scc.virginia.gov/clk/bussrch.aspx

IRS/Nonprofit Unit

(877)829-5500   

http://www.irs.gov/Charities-&-Non-Profits

 

 

 

 

 

 

 

 

 

 

 

 

 

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Sales Tax Rate Chart:

Rates Effective July 1, 2013: Retail Sales and Use Tax
Area Sales Tax Rate
 
Northern Virginia 6%
Hampton Roads 6%
Elsewhere thoughout Virginia 5.3%

 

 

Last Updated 2/14/2014 16:43

 

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