Tax Type
Retail Sales and Use Tax
Description
Institutions of Learning;Inapplicability to Patriotic Educational Organizations
Topic
Exemptions
Date Issued
03-14-1985
March 14, 1985
Dear ******
This will reply to your letter of February 25, 1985 requesting sales and use tax exemption for * * * (Taxpayer).
FACTS
Taxpayer, a nonprofit 501(c)(3), Virginia Corporation, is organized for the purposes of promoting and developing constructive citizenship among the people of the United States through patriotic education, and by all available means and media. In furtherance of its purposes, Taxpayer publishes and markets patriotic books and materials for use by public and private schools, libraries and organizations such as American Legion Boys and Girls State.
DETERMINATION
Secs. 58.1-603 and 58.1-602(19), of the Virginia Code, set forth the general rule that all sales and tangible personal property are subject to the sales tax. Furthermore, Sec. 63-10-35.2 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.'
Sec. 58.1-608(23) exempts from sales and use taxation, tangible personal property used or consumed "by a college or other institution of learning . . . provided such college [or] institution of learning is not conducted for profit.'
Sec. 630-10-96(A)(1) of the Regulations further state, that for an organization to qualify as an "institution of learning' for purposes of the sales and use tax exemption, the organization must:
Secondly, Taxpayers 501(c)(3) status does not automatically make it eligible for exemption from the sales and use tax. There is no basis in Virginia law for exempting all nonprofit corporations. Sec. 630-10-74 of the 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 any books or materials purchased for resale to schools, libraries, and other organizations. Taxpayer may apply for a certificate of exemption (Form ST-10) from the sales tax. Taxpayer must then collect the sales tax at the point of resale to such organizations, (unless such sales are otherwise exempt) and remit such tax to the state. * * *.
Based on all the foregoing, despite Taxpayer's laudable patriotic educational goals and objectives, there is no basis in Virginia law to grant an exemption from the sales and use tax.
Dear ******
This will reply to your letter of February 25, 1985 requesting sales and use tax exemption for * * * (Taxpayer).
FACTS
Taxpayer, a nonprofit 501(c)(3), Virginia Corporation, is organized for the purposes of promoting and developing constructive citizenship among the people of the United States through patriotic education, and by all available means and media. In furtherance of its purposes, Taxpayer publishes and markets patriotic books and materials for use by public and private schools, libraries and organizations such as American Legion Boys and Girls State.
DETERMINATION
Secs. 58.1-603 and 58.1-602(19), of the Virginia Code, set forth the general rule that all sales and tangible personal property are subject to the sales tax. Furthermore, Sec. 63-10-35.2 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.'
Sec. 58.1-608(23) exempts from sales and use taxation, tangible personal property used or consumed "by a college or other institution of learning . . . provided such college [or] institution of learning is not conducted for profit.'
Sec. 630-10-96(A)(1) of the Regulations further state, that for an organization to qualify as an "institution of learning' for purposes of the sales and use tax exemption, the organization must:
-
- a) employ a 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 a professionally trained faculty
Secondly, Taxpayers 501(c)(3) status does not automatically make it eligible for exemption from the sales and use tax. There is no basis in Virginia law for exempting all nonprofit corporations. Sec. 630-10-74 of the 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 any books or materials purchased for resale to schools, libraries, and other organizations. Taxpayer may apply for a certificate of exemption (Form ST-10) from the sales tax. Taxpayer must then collect the sales tax at the point of resale to such organizations, (unless such sales are otherwise exempt) and remit such tax to the state. * * *.
Based on all the foregoing, despite Taxpayer's laudable patriotic educational goals and objectives, there is no basis in Virginia law to grant an exemption from the sales and use tax.
Rulings of the Tax Commissioner