Tax Type
Retail Sales and Use 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 your letter in which you request a ruling regarding the availability of a retail sales and use tax exemption for ***** (the "Taxpayer').
FACTS
The Taxpayer is a nonprofit corporation providing infant and preschool child care services. The vision and philosophy of the Taxpayer encompasses the need for high quality infant and child care in a warm, loving, educational environment while providing for the developmental needs of the children. The Taxpayer prepares the children for school life by encouraging them to be actively involved in the learning process and to experience a variety of activities appropriate for their ages and rates of development.
RULING
There is no general exemption from the Virginia Retail Sales and Use Tax for nonprofit organizations. The only exemptions from the tax are set out in Code of Virginia §§ 58.1-609.1 through 58.1-609.10.
Code of Virginia § 58.1-609.4(9)(a) and (b) provide exemptions from the tax for purchases of tangible personal property by certain institutions of learning and day care centers/preschools, respectively. To qualify for the day care exemption, an organization must:
Based on the information provided, the Taxpayer does not qualify for the exemption. Under the rule of strict construction established by the courts, the Taxpayer must satisfy ail of the above criteria to qualify for the exemption. There is no documentation indicating that the Taxpayer has a regularly prescribed curriculum.
If the Taxpayer can provide the department with information demonstrating that it meets all of the listed requirements, the Taxpayer's request for exemption will be reconsidered.
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/25007Q
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****
This is in reply to your letter in which you request a ruling regarding the availability of a retail sales and use tax exemption for ***** (the "Taxpayer').
FACTS
The Taxpayer is a nonprofit corporation providing infant and preschool child care services. The vision and philosophy of the Taxpayer encompasses the need for high quality infant and child care in a warm, loving, educational environment while providing for the developmental needs of the children. The Taxpayer prepares the children for school life by encouraging them to be actively involved in the learning process and to experience a variety of activities appropriate for their ages and rates of development.
RULING
There is no general exemption from the Virginia Retail Sales and Use Tax for nonprofit organizations. The only exemptions from the tax are set out in Code of Virginia §§ 58.1-609.1 through 58.1-609.10.
Code of Virginia § 58.1-609.4(9)(a) and (b) provide exemptions from the tax for purchases of tangible personal property by certain institutions of learning and day care centers/preschools, respectively. To qualify for the day care exemption, an organization must:
- be exempt from federal income taxation under IRC § 501(c)(3);
- be organized primarily for the purpose of operating a state-licensed day care center or a preschool;
- hire only certified public school teachers or teachers who are college graduates holding a degree from an accredited four year institution of higher education and certified by an organization recognized by the U.S. Department of Education or by some other nationally recognized organization; and
- have a regularly prescribed curriculum.
Based on the information provided, the Taxpayer does not qualify for the exemption. Under the rule of strict construction established by the courts, the Taxpayer must satisfy ail of the above criteria to qualify for the exemption. There is no documentation indicating that the Taxpayer has a regularly prescribed curriculum.
If the Taxpayer can provide the department with information demonstrating that it meets all of the listed requirements, the Taxpayer's request for exemption will be reconsidered.
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/25007Q
Rulings of the Tax Commissioner