Tax Type
Corporation Income Tax
Description
Nonprofit educational organizations; Meals and lodging
Topic
Taxability of Persons and Transactions
Date Issued
03-31-2000
March 31, 2000
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This is in reply to your letter of February 23, 2000, in which you request a ruling regarding the application of the retail sales and use tax to purchases of meals and lodging by **** (the "Taxpayer").
FACTS
The Taxpayer is a nonprofit educational institution, and may purchase tangible personal property exempt of the sales tax pursuant to Code of Virginia § 58.1-609.4(2). During the school year students will participate in field trips, some of which may involve viewing the process of government in action. The Taxpayer seeks exemption from taxable services on the basis that it also qualifies for the exemption provided under Code of Virginia § 58.1-609.4(4), which relates to educational institutions providing face-to-face educational experiences in American government.
RULING
The exemption found in Code of Virginia § 58.1-609.4(4) for institutions providing a face-to-face educational program in American government was the first exception to the original nonprofit college or institution of learning exemption. The intent of the statute was that it would apply only to organizations that focus on providing certain experiences in American government. The face-to-face experience requires program participants to attend lectures, seminars and workshops that include presentations by officials in local and national government on the processes and issues of government, and sessions of Congress or committee hearings. As such programs entailed overnight excursions requiring lodging and meals for the program participants, the exemption was enacted to provide a specific class of nonprofit educational institutions exemption from the tax on purchases and services, i.e., meals and lodging.
The Virginia courts have consistently required strict construction of exemption statutes, i.e., where there is any doubt as to the application of an exemption, the doubt is resolved against the one claiming the exemption.
Based on the information provided, the Taxpayer is a nonprofit secondary institution of learning that does not focus on providing certain experiences in American government. Therefore, I find that the Taxpayer is not entitled to the exemption provided in Code of Virginia § 58.1-609.4(4). I have enclosed a copy of an excerpt from the Virginia Sales and Use Tax Expenditure Study, Vol. 2, No. 2, published by the department, which discusses in detail the exemption for face-to-face educational programs.
If you should have any questions regarding this matter, please contact **** of the department's Office of Tax Policy at ****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/27245Q
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This is in reply to your letter of February 23, 2000, in which you request a ruling regarding the application of the retail sales and use tax to purchases of meals and lodging by **** (the "Taxpayer").
FACTS
The Taxpayer is a nonprofit educational institution, and may purchase tangible personal property exempt of the sales tax pursuant to Code of Virginia § 58.1-609.4(2). During the school year students will participate in field trips, some of which may involve viewing the process of government in action. The Taxpayer seeks exemption from taxable services on the basis that it also qualifies for the exemption provided under Code of Virginia § 58.1-609.4(4), which relates to educational institutions providing face-to-face educational experiences in American government.
RULING
The exemption found in Code of Virginia § 58.1-609.4(4) for institutions providing a face-to-face educational program in American government was the first exception to the original nonprofit college or institution of learning exemption. The intent of the statute was that it would apply only to organizations that focus on providing certain experiences in American government. The face-to-face experience requires program participants to attend lectures, seminars and workshops that include presentations by officials in local and national government on the processes and issues of government, and sessions of Congress or committee hearings. As such programs entailed overnight excursions requiring lodging and meals for the program participants, the exemption was enacted to provide a specific class of nonprofit educational institutions exemption from the tax on purchases and services, i.e., meals and lodging.
The Virginia courts have consistently required strict construction of exemption statutes, i.e., where there is any doubt as to the application of an exemption, the doubt is resolved against the one claiming the exemption.
Based on the information provided, the Taxpayer is a nonprofit secondary institution of learning that does not focus on providing certain experiences in American government. Therefore, I find that the Taxpayer is not entitled to the exemption provided in Code of Virginia § 58.1-609.4(4). I have enclosed a copy of an excerpt from the Virginia Sales and Use Tax Expenditure Study, Vol. 2, No. 2, published by the department, which discusses in detail the exemption for face-to-face educational programs.
If you should have any questions regarding this matter, please contact **** of the department's Office of Tax Policy at ****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/27245Q
Rulings of the Tax Commissioner