Tax Type
Retail Sales and Use Tax
Description
Museum of Fine Arts;Colleges and Other Institutions of Learning
Topic
Taxability of Persons and Transactions
Date Issued
03-04-1985
March 4, 1985
This will reply to your letter of November 24, 1984 requesting a ruling on the correct application of the sales and use tax to the * * *
FACTS
The * * * (hereinafter the museum), a nonprofit 501(c)(3) Virginia Corporation, is organized for the purposes of promoting, for its cultural, civic and educational value, the depiction of the history and evolution of all aspects of Transportation.
However, it is the museum's emphasis on the history of railroad transportation that has helped it to achieve the distinction of being the largest transportation museum in the south.
DETERMINATION
Secs. 58.1-603 and 58.1-602(19), of the Virginia Code, set forth the general rule that all sales of tangible personal property are subject to the sales tax. Furthermore, § 630-10-35.2 of the Virginia Sales and Use Tax Regulations states, in pertinent part, that "taxation is the rule and exemption the exception. Therefore exemptions from the sales and use tax are strictly construed.'
§ 58.1-608(44) exempts from the sales and use tax, "Tangible personal property purchased for use or consumption by a nonprofit museum of fine arts which is located on property owned by a city in Virginia and which receives more than half of its operating budget fees appropriated by the city.' Inasmuch as the term "museum of fine arts' is nowhere defined in the code, it must be given its generally accepted meaning. Webster's New Collegiate dictionary defines "museum' as "an institution devoted to the procurement, care, study and display of objects of lasting interest or value.' Furthermore, Websters defines "fine arts', as "art (painting, sculpture, or music) concerned primarily with the creation of beautiful objects.' Although the * * *, is clearly devoted to the procurement, care, study and display of objects of lasting interest or value, the objects displayed, do not fall within the generally accepted meaning of "fine arts'. Therefore, the museum would not qualify for the exemption granted by this section.
Nor would the museum qualify for the exemption for nonprofit colleges or institutes of learning provided by § 58.1-608(23). This section has been narrowly construed to include only organizations, which,
Lastly, the museums 501(c)(3) status does not automatically make it eligible for a sales and use tax exemption. There is no basis in Virginia law for exempting all nonprofit corporations. § 630-10-74 of the Virginia Sales and Use Tax Regulations states, in pertinent part, that in the absence of a specific exemption, "all tangible personal property purchased for use or consumption by religious, charitable, civic and other nonprofit organizations, is taxable.'
However, with respect to its purchase of tangible personal property for resale in its gift shop, the museum may apply for a certificate of exemption (Form ST-10) from the sales tax. However, the museum must then collect the sales tax at the point of resale to its gift shop customers, and remit such tax to the state. * * *
Based on the foregoing, despite the museums significant achievements and contributions to the Commonwealth, there is no basis in Virginia law to grant an exemption from the sales and use tax. However, as you are undoubtedly aware, House Bill 1262, which has been enrolled by the General Assembly and would be effective July 1, 1985, if signed by the Governor, would exempt the museum from the tax.
Sincerely,
W. H. Forst
Tax Commissioner
This will reply to your letter of November 24, 1984 requesting a ruling on the correct application of the sales and use tax to the * * *
FACTS
The * * * (hereinafter the museum), a nonprofit 501(c)(3) Virginia Corporation, is organized for the purposes of promoting, for its cultural, civic and educational value, the depiction of the history and evolution of all aspects of Transportation.
However, it is the museum's emphasis on the history of railroad transportation that has helped it to achieve the distinction of being the largest transportation museum in the south.
DETERMINATION
Secs. 58.1-603 and 58.1-602(19), of the Virginia Code, set forth the general rule that all sales of tangible personal property are subject to the sales tax. Furthermore, § 630-10-35.2 of the Virginia Sales and Use Tax Regulations states, in pertinent part, that "taxation is the rule and exemption the exception. Therefore exemptions from the sales and use tax are strictly construed.'
§ 58.1-608(44) exempts from the sales and use tax, "Tangible personal property purchased for use or consumption by a nonprofit museum of fine arts which is located on property owned by a city in Virginia and which receives more than half of its operating budget fees appropriated by the city.' Inasmuch as the term "museum of fine arts' is nowhere defined in the code, it must be given its generally accepted meaning. Webster's New Collegiate dictionary defines "museum' as "an institution devoted to the procurement, care, study and display of objects of lasting interest or value.' Furthermore, Websters defines "fine arts', as "art (painting, sculpture, or music) concerned primarily with the creation of beautiful objects.' Although the * * *, is clearly devoted to the procurement, care, study and display of objects of lasting interest or value, the objects displayed, do not fall within the generally accepted meaning of "fine arts'. Therefore, the museum would not qualify for the exemption granted by this section.
Nor would the museum qualify for the exemption for nonprofit colleges or institutes of learning provided by § 58.1-608(23). This section has been narrowly construed to include only organizations, which,
-
- (a) employ professionally trained faculty,
(b) enroll and graduate students on the basis of academic achievement,
(c) prescribe courses of study, and
(d) provide instruction at regular intervals over a reasonable period of time.
- (a) employ professionally trained faculty,
Lastly, the museums 501(c)(3) status does not automatically make it eligible for a sales and use tax exemption. There is no basis in Virginia law for exempting all nonprofit corporations. § 630-10-74 of the Virginia Sales and Use Tax Regulations states, in pertinent part, that in the absence of a specific exemption, "all tangible personal property purchased for use or consumption by religious, charitable, civic and other nonprofit organizations, is taxable.'
However, with respect to its purchase of tangible personal property for resale in its gift shop, the museum may apply for a certificate of exemption (Form ST-10) from the sales tax. However, the museum must then collect the sales tax at the point of resale to its gift shop customers, and remit such tax to the state. * * *
Based on the foregoing, despite the museums significant achievements and contributions to the Commonwealth, there is no basis in Virginia law to grant an exemption from the sales and use tax. However, as you are undoubtedly aware, House Bill 1262, which has been enrolled by the General Assembly and would be effective July 1, 1985, if signed by the Governor, would exempt the museum from the tax.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner