Tax Type
Retail Sales and Use Tax
Description
Church conference center and summer camp
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
07-31-1984
July 31, 1984
Re: Ruling Request: Sales and Use Tax
Dear ***************
This will reply to your letter of March 8, 1984 and your telephone conversation of June 25, 1984 with a member of my staff concerning a ruling on the applicability of Va. Code § 58-441.6(gg) (effective July 1, 1984) to purchases by the ***** ("Taxpayer").
FACTS
Taxpayer is the administrative arm of the ***** in the Southern Virginia region, in which there are 123 churches. Taxpayer, which 18 exempt from federal taxation under IRC § 501(c)(3), has its headquarters in *****. In one of the ***** buildings, in addition to offices and other rooms, is a chapel used by employees of the Taxpayer for weekly services. There is no congregation as such using this chapel. No classes are conducted at the headquarters.
Taxpayer owns and operates three conference centers, one of which is a separate building on the ***** headquarters property. Another center is in ***** (part of the Taxpayer's office at that location) and the third is in ***** in a separate building on the same grounds as the office. The centers operate year-round and are rented to nonprofit organizations approximately 35% of the time and, the balance of the time, to church groups for retreats. Worship is a minor part of the activities, although the church group meetings have religious education content.
Taxpayer also operates a summer camp in ***** for children from ages 7 or 8 to senior high school. The camp is nondenominational but there are regularly scheduled worship services in Taxpayer's religion.
DETERMINATION
Effective July 1, 1984, Va. Code § 58-441.6(gg) exempts from Virginia retail sales and use tax tangible personal property purchased by a nonprofit church which has an IRC § 501(c)(3) exemption for use (i) in religious worship services by a congregation or church membership while meeting together in a single location, and (ii) in any rooms in the public church buildings used in carrying out the work of the church and its related ministries.
The "religious worship services" exemption is in the present law and extends only to religious worship services sponsored by a church in its ordinary sense. Although religious worship services may be conducted in Taxpayer's administrative headquarters or in its conference facilities, there has been no assertion that the participants constitute a congregation or church membership. Accordingly, the first prong of the exemption does not apply to Taxpayer.
The second part of the exemption, items for use in the public church building and used in carrying out the work of the church and its related ministries, applies to "public church building" in its common meaning, that is, a building, the primary purpose of which is to house regularly scheduled religious worship services. Taxpayer's administrative headquarters and conference centers do not have such a primary purpose. Rather, they exist to administer the business operations of Taxpayer or to provide recreational or educational services to persons of any religious denomination. Religious worship is an additional occurrence at these locations.
Based on the foregoing, we find that Va. Code § 58-441.6(gg) does not exempt Taxpayer from sales and use tax on purchases for its administrative headquarters, camp and conference centers.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner