Tax Type
Retail Sales and Use Tax
Description
Bible College Accreditation Association
Topic
Taxability of Persons and Transactions
Date Issued
07-28-1989
July 28, 1989
Re: Request for Ruling: Sales and Use Tax
Dear**************
This is in reply to your letter of May 31, 1989, in which you requested a ruling whether your organization qualifies for exemption from the sales and use tax.
FACTS
****** ("The Taxpayer"), a nonprofit organization exempt from income taxation under §501(c)(3) of the Internal Revenue Code, is an accrediting body for Bible colleges in North America which holds its annual convention in October. The Taxpayer requests an exemption from the tax for tangible personal property purchased in connection with the annual convention.
RULING
Virginia law does not provide a general exemption from the sales and use tax for nonprofit organizations. However, Virginia Code §58.1-608(8)(b), formerly Virginia Code §58.1-608(38), provides a limited exemption from the sales and use tax for "tangible personal...purchased by churches organized not for profit...for use (i) in religious services by a congregation or church membership while meeting together in a single location, and (ii) in the libraries, offices, meeting or counseling rooms or other rooms in the public church buildings used in carrying out the work of the church and its related ministries.... "
Based on the rule of strict construction adopted by the Virginia courts in the interpretation of sales and use tax exemptions, not all religious organizations qualify for the above exemption, nor are all purchases by a qualifying organization eligible for the exemption.
To qualify for the exemption, a church must have a congregation or membership that meets at a single location for regularly scheduled worship services. Further, the exemption is limited solely to tangible personal property used in regularly scheduled religious worship services by the church congregation or membership or used inside the public church buildings utilized in carrying out the work of the church. Tangible personal property used outside the public church buildings is taxable.
Thus, tangible personal property used in conducting the convention in a hotel would be subject to the tax. In addition, charges for meals or catering and the rental of meeting space or other rooms in the hotel would be subject to the tax. It should be noted in this regard that purchases of meals and lodging by the state government and most nonprofit organizations that enjoy sales and use tax exemptions are also subject to the tax.
If you have any questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner