88-224 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Description

Institutions of learning; Exemption criteria

Topic

Taxability of Persons and Transactions

Date Issued

07-29-1988

July 29, 1988

Re: Request for Ruling/Retail Sales and Use Tax - Institutions of Learning

Dear***************

This is in reference to your letter of June 18, 1988, in which you requested a ruling as to whether the *********** ("The Center") qualifies for exemption from retail sales and use tax.

FACTS

The Center is an independent nonprofit educational organization which conducts seminars and workshops in leadership development. Seminar topics include management training, problem solving, interpersonal skills in team building, personal evaluation, problem employees, improving moral, coordination and productivity, finance, accounting and auditing, and data processing. The Center's seminars and workshops range from a one day program to a six month program which meets two days a month. Students who successfully complete a seminar or workshop receive a certificate of achievement. Students who successfully complete a six month seminar (by fulfilling practicum requirements) receive a certificate and are eligible for graduate credit from the University of Southern California.

RULING

Virginia Code §58.1-608 (23) provides an exemption from the sales and use tax for purchases for use or consumption by nonprofit colleges or other institutions of learning. Virginia Retail Sales and Use Tax Regulations §630-10-96(A)(1), provides that for an organization to qualify as an "institution of learning" for purposes of 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.
  
  d) Provide instruction at regular intervals over a reasonable period of time.

Applying the facts of this case to the regulations and code section cited above, I find that the Center does not meet all of the criteria necessary to qualify as a nonprofit institution of learning for purposes of the exemption from the sales and use tax. While a certificate is awarded to participants upon completion of the seminars or workshops, students are not "graduated" on the basis of academic achievement. Also, the seminary offered last no more than a total of twelve days which is not sufficient length to constitute a "reasonable period of time." See Tax Commissioner's Ruling of February 17, 1983, and February 14, 1985 (copies enclosed).

Therefore, the Center is required to pay the tax on all purchases of tangible personal property to the retailer at the time of purchase. If the retailer is not registered to collect the tax, the Taxpayer must report and pay the use tax on a Consumer Use Tax Return, ST-7.

If I can be of further assistance, please contact the Department.

Sincerely,

W. H. Forst
Tax Commissioner

Rulings of the Tax Commissioner