Tax Type
Retail Sales and Use Tax
Description
Occasional sales; Charitable dinners; Local sales and use
Topic
Local Taxes Discussion
Date Issued
11-30-1999
Mr. Jacob P. Stroman IV County Attorney for Gloucester County |
You ask whether, pursuant to § 35.1-25(3) of the Code of Virginia, an organization which holds five dinners a year to raise money for its charitable causes is exempt from a food and beverage tax levied under § 58.1-3833. You ask specifically for an interpretation of the word "occasional' in § 35.1-25(3).
Section 58.1-3833(A) provides:
- Any county is hereby authorized to levy a tax on food and beverages sold, for human consumption, by a restaurant, as such term is defined in subdivision 9 of § 35.1-1... Such tax shall not be levied on food and beverages sold . . . by any person described in subdivisions 1, 2, 3, and 5 of § 35.1-25
- Churches, fraternal, school and social organizations, and volunteer fire departments and rescue squads which hold occasional dinners, bazaars, and other fund raisers of one or two days' duration, at which food prepared in the homes of members or in the kitchen of the church, school or organization is offered for sale to the public[.]
A locality likewise may establish a numerical definition of the term "occasional' for purposes of the food and beverage tax. The local standard need not be the same as the standard established by the Department of Taxation in defining "occasional sale.' The Department of Taxation's definition is consistent with the principle that statutes granting exemptions from the state sales and use tax are to be narrowly construed.3 On the other hand, statutes granting taxing power to localities are also to be narrowly construed.4 This distinction would justify a county establishing a standard less strict than the one established by the state sales and use tax regulations.5
1 Sections 58.1-600 to 58.1-639 .§ 58.1-602 defines "occasional sale' as "a sale of tangible personal property not held or used by a seller in the course of an activity for which he is required to hold a certificate of registration.' A nonprofit organization that regularly sells tangible personal property is required to register as a dealer, unless specifically exempted by statute. See 23 VAC 10-210-1070(A) (Law .Coop. 1996).
2 23 VAC 10-210-1072(C) (Law. Coop. 1996). This regulation further provides that "sales made at fairs, flea markets, festivals and carnivals are not considered occasional sales.' Id.
3 See Commonwealth v. Research Analysis, 214 Va. 161, 198 S.E.2d 622 (1973); see also 1989 Op. Va. Att'y Gen. 327, 329.
4 See Hampton Nissan v. City of Hampton, 251 Va. 100, 105, 466 S.E.2d 95, 98 (1996) (city derives taxing power through positive grants of legislative authority; must be able to identify statute conferring taxing authority); see also Op. Va. Att'y Gen.: 1997 at 186, 187; 1995 at 260, 262.
5 In the absence of an ordinance establishing a definition of "occasional,' the local taxing authority should apply a uniform and reasonable standard. Under the language of § 35.1-25(3), any fundraiser of more than two days' duration would not be entitled to the exemption.
Attorney General's Opinion