Tax Type
Retail Sales and Use Tax
Description
Nonprofit nutrition program for the elderly and handicapped; Exemption status
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
11-03-1986
November 3, 1986
Re: Ruling Request
Sales and Use Tax
Dear ************************
This is in reply to your letter of April 16, 1986 and your subsequent telephone conversations with of the department's Tax Policy Division. You have requested a ruling regarding the applicability of the exemption from the Virginia Retail Sales and Use Tax granted under Virginia Code §58.1-608.45 to your organization,
FACTS
******* (Organization) is a nonprofit nutritional program for the elderly and handicapped. It is exempt from income taxation under the provisions of §501 (c) (3) of the Internal Revenue Code. organization is comprised of over 500 volunteers which provide home delivered meals to approximately 95 elderly and handicapped subscribers daily. Most of the subscribers pay for the cost of the meals and contributions are solicited to help pay the cost of the meals for those subscribers unable to pay. organization receives no government funds to enable it to provide this service.
You request a ruling regarding the applicability of the exemption from the Virginia Retail Sales and Use Tax granted under Virginia Code §58.1-608.45.
RULING
The Code of Virginia imposes either a retail sales tax on all sales of tangible personal property in Virginia or the complementary use tax on the use or consumption of tangible personal property in Virginia. The only exemptions from the tax are the ones specifically provided by statute. There is no general exemption from the sales and use tax available for nonprofit organizations. The courts have long ruled that taxation is the rule and exemptions are to be strictly construed (Retail Sales and Use Tax Regulation §630-10-35.2). Unless organization's activities are statutorily exempted from the tax, no exemption is available.
Virginia Code §58.1-608.45 provides an exemption from the Virginia Retail Sales and Use Tax for:
-
- Tangible personal property sold or leased for use in nonprofit nutrition programs for the elderly qualifying under 42 U.S.C. 3030 (e) through 3030 (g), as amended, as administered by the Virginia Department for the Aging, and the food and food products sold under such programs to elderly persons.
- Tangible personal property sold or leased for use in nonprofit nutrition programs for the elderly qualifying under 42 U.S.C. 3030 (e) through 3030 (g), as amended, as administered by the Virginia Department for the Aging, and the food and food products sold under such programs to elderly persons.
Based upon the information provided by you, Organization is providing meals to both elderly and handicapped individuals. Also, organization currently has no connection or affiliation with the Virginia Department for the Aging. Because organization does not currently meet the two qualification requirements necessary for the exemption, the exemption is not applicable to its operations at the present time.
If in the future organization does become affiliated with a program administered by the Virginia Department for the Aging, it may qualify for the exemption. The local Area Agencies on Aging annually subcontract the nutritional program for the elderly in their area to local organizations. If organization is awarded such a contract, they may be entitled to make qualifying purchases and sales exempt of the tax. However, only the purchases and sales connected with subscribers which are elderly will qualify to be made exempt of the tax.
If you have any further questions concerning organization's status, please do not hesitate to contact this office.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner