Document Number
Tax Type
Retail Sales and Use Tax
PTA book fair
Taxability of Persons and Transactions
Date Issued
October 27, 1988

Re: Request for Ruling: Sales and Use Tax


This will reply to your letter of October 4, 1988, in which you request a ruling on the application of the sales and use tax to a fund-raising activity conducted by your parent-teacher association.

Your PTA is planning to conduct a book fair to raise funds for donation to the elementary school that it serves. The PTA has arranged with a local book store to actually conduct the book fair. Records of book fair sales will be segregated from other sales records and the book store will provide a portion of the receipts from the book fair sales to your PTA. The entire amount of funds raised by the PTA from this project will be donated to the elementary school.

You wish to determine whether collection of the sales tax will be required based upon these facts.

§58.1-608.63 of the Code of Virginia provides an exemption from the sales and use tax for:
    • Tangible personal property purchased for use, consumption, or sale at retail by an elementary or secondary school conducted not for profit, or Parent Teacher Associations or other groups associated with an elementary school conducted not for profit for use in fund-raising activities, the net proceeds (gross proceeds less direct expenses) of which are contributed directly to the school or used to purchase certified school equipment; and certified school equipment purchased by such groups for contribution directly to the school.

The Virginia courts have adopted a rule of strict construction in interpreting sales and use tax exemptions, such as the one above. Under this rule, the courts have held that "taxation is the rule and not the exception; and that statutory tax exemptions are construed strictly against the taxpayer, with doubts resolved against the exemptions." Commonwealth v. Research Analysis Corporation, 214 Va. 161, 198 S.E.2d 622 (1973).

To gain exemption under the above statute, a sale first must be conducted by a nonprofit elementary or secondary school or by a PTA or other organization associated with the school. In this case, however, the sale will be conducted by a bookstore that is not affiliated with a school. Because of this, sales at the book fair will not qualify for the exemption.

The book fair also will not qualify for exemption under the 1987 amendment to §58.1-608.63, which provides:
    • Notwithstanding the other provisions of this subdivision, the tax shall not apply to the sale of class rings, school photographs, and other fund-raising programs from which an elementary or secondary school conducted not for profit receives a commission or the net proceeds after the payment of vendors and other direct expenses.
This provision was intended to exempt sales by jewelers, photographers, etc., when a portion of their receipts was returned directly to an elementary or secondary school in the form of a commission. In this case, the book store will provide the funds to the PTA rather than directly to the school, thus the exemption does not apply.

Please feel free to contact the department if you have any further questions.


W. H. Forst
Tax Commissioner

Last Updated 08/25/2014 16:46