Tax Type
Retail Sales and Use Tax
Description
Exemption request for a nonprofit organization
Topic
Exemptions
Date Issued
06-04-2001
June 4, 2001
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"). I apologize for the delay in responding to your request.
FACTS
The Taxpayer, a nonprofit organization exempt from federal income taxation pursuant to § 501(c)(3) of the Internal Revenue Code, is a Housing and Urban Development 202 Section 8 retirement community. The Taxpayer is organized to promote, develop, and operate a non-profit, subsidized, multi-family housing project in Northern Virginia for the benefit of elderly persons.
RULING
Code of Virginia § 58.1-609.8(40) provides an exemption from the retail sales and use tax from:
July 1, 1995, through June 30, 2001, food, food products, and services sold to residents under a Department of Housing and Urban Development-approved meal plan by a nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code and receiving federal grant assistance under the Department of Housing and Urban Development Section 8 programs and from July 1, 1998, through June 30, 1999, tangible personal property purchased for use or consumption by a nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code and receiving federal grant assistance under the Department of Housing and Urban Development Section 8 programs.
Based on a review of the Taxpayer's Articles of Incorporation and other information provided, I find that the Taxpayer satisfies the criteria in Code of Virginia § 58.1-609.8(40). The Taxpayer may purchase food, food products and services sold to residents under a Department of Housing and Urban Development-approved meal plan exempt of the tax. However, the portion of the statute that exempts tangible personal property was not extended by the 2001 General Assembly; therefore, the Taxpayer must pay the tax on its purchases of tangible personal property.
If the Taxpayer is interested in pursuing exemption legislation during the 2002 General Assembly Session, the enclosed questionnaire for legislation consideration of sales and use tax exemption must be completed and forwarded to the legislator who will sponsor the bill to extend the exemption to purchases of tangible personal property. The legislator must sign the questionnaire and submit it to the department by November 1, 2001, in order for the exemption request to be considered by the 2002 General Assembly. I have also enclosed Virginia Tax Bulletin 94-13, which explains the procedure and information required for legislative consideration of sales tax exemption legislation.
As verification of the Taxpayer's exempt status for purchases of food, food products and services under a Department of Housing and Urban Development approved plan, a copy of this letter should be furnished to each vendor from whom exempt purchases are made. This letter may be used through June 30, 2001. Prior to July 1, 2001, the Taxpayer will receive a separate tax-exempt number that must be furnished to your vendors for tax-exempt purchases made on or after July 1, 2001.
If you have questions regarding this matter, you may contact ****** of the department's Office of Tax Policy at *****
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/32019C
Rulings of the Tax Commissioner