Tax Type
Retail Sales and Use Tax
Description
Job Corps contractors
Topic
Taxability of Persons and Transactions
Date Issued
06-20-1988
June 20, 1988
Re: Ruling Request
Retail Sales and Use Tax
Dear***************
This is in reply to your letter of April 8, 1988 requesting a ruling regarding an exemption from the payment of the retail sales and use tax on the purchase of equipment, supplies and services necessary to fulfill the requirements of your organization's contract with the United States Department of Labor.
********** (Union) currently has a contract with the United States Department of Labor in connection with the operation of a Job Corps program. Pursuant to 29 U.S.C.A. §1707(c):
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- Such contractors shall not be liable to any State or subdivision thereof to collect or pay any sales, excise, use, or similar tax imposed upon the sale to or use by such contractors of any property, service, or other item in connection with the operation of a Job Corps Center, program, or activity.
- Such contractors shall not be liable to any State or subdivision thereof to collect or pay any sales, excise, use, or similar tax imposed upon the sale to or use by such contractors of any property, service, or other item in connection with the operation of a Job Corps Center, program, or activity.
Accordingly, in order for a transaction to be exempt in this case, the transaction must be pursuant to an official purchase order of the Union to be paid out of union funds and such purchase order must specify that the purchase is in connection with the Union's operation of a Job Corps Center, program, or activity.
The tax is applicable when sales are made without the required purchase orders and are not paid out of union funds. If a Union employee is traveling on union business in connection with the Union's operation of a Job Corps Center, program, or activity and payment for meals and lodging is made directly by the union pursuant to a purchase order (e.g., by direct billing to the union or use of union credit card), no tax will apply. However, if the employee pays for meals and lodging with personal funds and will be reimbursed by the union or utilizes a travel advance, no exemption is available even though the employee may be traveling pursuant to official union orders.
The Union should present a copy of this letter to its Virginia vendors, as evidence of exemption, when making purchases pursuant to its contract with the United States Department of Labor in connection with the operation of a Job Corps program. The Union should continue to pay the applicable sales tax on all other Purchases.
If you have any additional questions, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner