Tax Type
Retail Sales and Use Tax
Description
Youth development education program
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
11-07-1989
November 7, 1989
Re: Request for Ruling: Sales and Use Tax
Dear******************
This will reply to your letter of May 5, 1989 in which you request a ruling on whether**********and ************* organizations qualify for exemption from the sales and use tax under Virginia Code §58.1-608(8)(n).
FACTS
**********(the "Clubs") and organizations (the "Organizations"), nonprofit organizations exempt from income taxation under §501(c)(3) of the Internal Revenue Code, were created to assist youths, and adults working with those youths, to gain additional knowledge, life skills, and attitudes that will further their development as self-directing, contributing, and productive members of society. The Clubs and Organizations comprise the youth development education program of theRULING
Virginia Code §58.1-608(8)(n) provides an exemption from retail sales and use tax for:
-
- [t]angible personal property purchased for use or consumption, or to be sold at retail, by any nonsectarian youth organization exempt from taxation under §501(c)(3) of the Internal Revenue Code which is organized for the purposes of the character development and citizenship training of its members using the methods now in common use by Girl Scout or Boy Scout organizations in Virginia.
Under principles established by the courts, exemptions from the sales and use tax are strictly construed. To quality for the above exemption, an organization must meet all of the criteria it must (i) be a nonprofit nonsectarian youth organization, (ii) be organized for the character development and citizenship training of its members, and (iii) use the methods now in common use by Girl Scout or Boy Scout organizations in Virginia.
Based upon review of the information which you provided and applying the rule of narrow construction for exemptions from taxation, I find that the Clubs qualify for exemption under Virginia Code §58.1-608(8)(n); however, the organizations do not. The purposes of the organizations generally are more limited than those of the clubs and thus they fail to meet all of the criteria explained above. While the organizations serve many worthwhile purposes, absent a statutory exemption that would allow the organizations to make purchases exempt of the tax, the department has no authority to grant them an exemption.
Therefore, the exemption for the Clubs applies only to tangible personal property purchased for use or consumption by the Clubs. This exemption also allows the Clubs to make sales exempt from the tax. Tangible personal property purchased by the organizations, however, will be subject to the tax.
If you have any further questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner