Tax Type
Retail Sales and Use Tax
Description
Employee training program
Topic
Taxability of Persons and Transactions
Date Issued
01-04-1988
January 4, 1988
Re: Request for Ruling/Sales and Use Tax
Dear***************
This is in reply to your letter dated September 4, 1987 to request a ruling on the application of the sales and use tax to purchases by **********the for its educational programs. I apologize for not responding to your earlier letter, but we have no record of your June 8 correspondence on file.
FACTS
The *********** (the fund) was established as a joint effort by local labor organizations and the private construction companies they serve. The fund was created to provide employee training, advanced training, construction technical education, safety education, educational and informational programs for the betterment of employees and the common good of the industry, other programs for training and generally upgrading employee's abilities and opportunities within the industry, as well as certain other activities.
The fund conducts training classes Monday thru Friday from 8:00 am until 3:00 pm, with Certificates of Training being presented upon successful completion of each class. The instructors for the fund have many years of experience in the construction industry.
The fund request exempt status from the sales and use tax for materials purchased in connection with its educational programs.
RULING
§58.1-608(230 of the Code of Virginia exempts from the sales and use tax "[t]angible personal property for use or consumption by a college or other institution of learning...provided such college, institution of learning...is not conducted for profit."
In order to qualify for this exemption "other institutions of learning" must meet certain criteria stipulated by §(A)(1) of Virginia Regulation 630-10-96. According to the regulation, "other institutions of learning" must be similar to a college, in that, they must:
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- (a) employ a professionally-trained faculty; (b) enroll and graduate students on the basis of academic achievement: (c) prescribe courses of study; and (d) provide instruction at regular intervals over a reasonable period of time.
- (a) employ a professionally-trained faculty; (b) enroll and graduate students on the basis of academic achievement: (c) prescribe courses of study; and (d) provide instruction at regular intervals over a reasonable period of time.
The exemption requires an organization to be "similar to a college". A college is an institution of learning which possesses the right to confer degrees or diplomas to students who complete a course of study upon achieving a minimum academic standard set by the institution. While the fund does present "Certificates of Training" to individuals who successfully complete a course, each class is self contained and deals with only one subject area. Therefore, the fund is not "similar to a college" and fails to qualify for this exemption.
Consequently, I can find no basis for granting an exemption from the sales and use tax for materials purchased by the fund in conjunction with its educational programs.
If you have any questions regarding this matter, I hope you will not hesitate to contact me.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner