Tax Type
Corporation Income Tax
Description
Determination of Exempt Status
Topic
Exemptions
Date Issued
03-31-2000
March 31, 2000
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****
This is in reply to a letter dated January 16, 2000, which requests a sales and use tax exemption for ***** (the "Taxpayer').
FACTS
The Taxpayer is organized as an educational ministry to meet the religious needs of the undergraduate and graduate students, faculty, and staff of the university, as well as those affected by concerns of the community and higher education. The Taxpayer has represented that it is not an established church, but seeks an exemption from the sales and use tax for purchases used in its ministry due to its close affiliation with an established religion.
RULING
Virginia law does not provide a general exemption from the sales and use tax for nonprofit organizations. Code of Virginia Sec. 58.1-609.8(2) provides a limited exemption for the sales and use tax for "tangible personal property ... purchased by churches organized not for profit ... for use (i) in religious services by a congregation or church membership while meeting together in a single location, and (ii) in the libraries, offices, meeting or counseling rooms or other rooms in the public church buildings used in carrying out the work of the church and its related ministries....'
To qualify for the exemption set forth above, a church must have a congregation or membership that meets at a single location for regularly scheduled worship services. As indicated by one of your representatives, the Taxpayer is not an established church as it does not have a congregation or membership in the sense that these terms are applicable to a church. Therefore, based on the information provided and based on the rule of strict construction adopted by the Virginia courts in the interpretation of sales and use tax exemptions, I find that the Taxpayer does not qualify for exemption from the retail sales and use tax as provided in Code of Virginia Sec. 58.1-609.8(2).
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/26751Q
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****
This is in reply to a letter dated January 16, 2000, which requests a sales and use tax exemption for ***** (the "Taxpayer').
FACTS
The Taxpayer is organized as an educational ministry to meet the religious needs of the undergraduate and graduate students, faculty, and staff of the university, as well as those affected by concerns of the community and higher education. The Taxpayer has represented that it is not an established church, but seeks an exemption from the sales and use tax for purchases used in its ministry due to its close affiliation with an established religion.
RULING
Virginia law does not provide a general exemption from the sales and use tax for nonprofit organizations. Code of Virginia Sec. 58.1-609.8(2) provides a limited exemption for the sales and use tax for "tangible personal property ... purchased by churches organized not for profit ... for use (i) in religious services by a congregation or church membership while meeting together in a single location, and (ii) in the libraries, offices, meeting or counseling rooms or other rooms in the public church buildings used in carrying out the work of the church and its related ministries....'
To qualify for the exemption set forth above, a church must have a congregation or membership that meets at a single location for regularly scheduled worship services. As indicated by one of your representatives, the Taxpayer is not an established church as it does not have a congregation or membership in the sense that these terms are applicable to a church. Therefore, based on the information provided and based on the rule of strict construction adopted by the Virginia courts in the interpretation of sales and use tax exemptions, I find that the Taxpayer does not qualify for exemption from the retail sales and use tax as provided in Code of Virginia Sec. 58.1-609.8(2).
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/26751Q
Rulings of the Tax Commissioner