Tax Type
Corporation Income Tax
Description
Nonprofit corporation
Topic
Exemptions
Date Issued
09-11-1989
September 11, 1989
Re: Ruling Request/ Corporate Income Tax
Dear **************
This will reply to your letter of February 28, 1989 seeking an exemption from Virginia income tax for the ********************* (taxpayer).
FACTS
The taxpayer is a private social club which was recently granted tax exempt status by the Internal Revenue Service under I.R.C. §501(c)(7). The taxpayer seeks a similar exemption from Virginia income tax.
RULING
Virginia Code §58.1-401 and Virginia Corporation Income Tax Regulation (VR) 630-3-401(F) exempt from the state income tax, nonprofit corporations which are exempt from federal income tax under I.R.C. §501(c).
Based on the determination by the Internal Revenue Service that the taxpayer qualifies for exemption from federal income tax under I.R.C. §501(c)(7), and the Virginia Code and regulation sections cited above, the taxpayer qualifies for exemption from Virginia income tax. However, if the taxpayer has unrelated business taxable income as defined in Internal Revenue Code §512, it must file a Virginia return and pay Virginia income tax on such income.
Let the department know if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner