Tax Type
Retail Sales and Use Tax
Description
Nonprofit Cooperatives
Topic
Returns/Payments/Records
Date Issued
01-05-1978
This is in response to your inquiry in which you ask whether a nonprofit cooperative could be excluded from complying with the provisions of § 58-441.21:1 of the Code of Virginia (1950), as amended. That section provides for the accelerated payment of sales tax collections by dealers to the state. Under its terms, a dealer is required to make an annual payment representing two-thirds of his average monthly liability. This payment is intended to approximate the tax collections of a dealer for the first twenty days of a month, which will have already been collected when the dealer pays his monthly liability by the twentieth day of the succeeding month.
Section 58-441.21:1 requires every "dealer' to make the payment described therein. § 58-441.12 defines the term "dealer' in such a manner as to include any entity which makes sales at retail, as defined by § 58-441.2(c). Pursuant to that section a sale at retail is one "to any person for any purpose other than for resale. . . .' Consequently, a cooperative making such sales to its members is a "dealer' and is required to comply with the terms of § 58-441.21:1. I am aware of no provision of law which would provide an exemption from compliance with the terms of § 58-441.21:1 by a nonprofit cooperative.
Information regarding a particular cooperative attached to your opinion request indicates that this requirement might pose a burden on a cooperative which has widely fluctuating sales tax collections. For example, if the average monthly liability of the cooperative was determined to be $1300, but the actual sales tax collections for the month in which the payment had to be made only amounted to $800, the cooperative, since it is a nonprofit organization, would be required to obtain the additional $500 from its members. § 58-441.21:1 contains a provision which allows the payment thereunder, in the initial year, to be made in two equal installments the first, within thirty days of the notice from the Tax Department and the second such payment, within five months of that notice. This provision should alleviate to some degree the hardship you have described.
Attorney General's Opinion