Tax Type
Retail Sales and Use Tax
Description
Organization created by an Act of Congress; Exemption criteria
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
03-31-1987
March 31, 1987
Re: Ruling Request/ Sales and Use Tax
Dear *****************
This will reply to your letter of November 24, 1986 and additional information submitted by letter dated January 18. 1987 seeking an exemption from Virginia's sales and use tax for the above referenced organizations.
According to your letter. the********* was organized to conduct the fiscal affairs of the ********* was created by an Act of Congress and has been held by the Department of the Treasury to be an exempt organization since 1964.
The ************** has also been held by the Department of the Treasury to be an exempt organization since 1974.
**********(hereinafter )and subsidiary units or the*********** conduct National conferences and other meetings in the various states and territories of the United States from time to time, to which members are invited.
Therefore. you request a ruling whether the***********the and subsidiary units of the *********qualify for exemption from the sales and use tax in making purchases of tangible personal property as instrumentalities of the U.S. Government under §58.1-608(18) of the Virginia Code.
RULING
Sections 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."
In addition, there is no blanket exemption in the sales and use tax for organizations which are exempt from federal income taxation.
Section 58.1-608(18) of the Code provides an exemption from the sales tax for "[t]angible personal property for use or consumption by the Commonwealth, any Political subdivision of the Commonwealth, or the United States. This exclusion snail not apply to sales and leases to privately owned financial and other privately owned corporations chartered by the United States."
Based on all of the foregoing, I find no basis for concluding that the exemption granted in the above referenced Code section. and in §630-10-45 of the Virginia Sales and Use Tax Regulations for instrumentalities of the U.S. Government, applies to the organizations named in your letter. (See, copy of §630-10-45 of the Regulations enclosed)
While such organizations are closely related to an arm of the U.S. Government, namely the ************* they have not been shown to be an actual part of the government entitled to all the immunities and privileges of a federal instrumentality.
I hope this has responded to your questions but please let me know if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner