Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization operating a public law library
Topic
Taxability of Persons and Transactions
Date Issued
01-18-1989
January 18, 1989
Re: Request for Ruling: Sales and Use Tax
Dear*****************
This will reply to your letter of dated December 7, 1988, to********** in which you requested him to contact the department seeking a ruling whether your organization qualifies for exemption from sales and use tax.
FACTS
************* ("The Library"), a nonprofit organization exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code, operates a public law library serving the community, the bench, and the bar.
RULING
There is no general exemption from Virginia Retail Sales and Use Tax for nonprofit organizations (see enclosed copy of Virginia Regulation §630-10-74). The only exemptions from the tax are set out in §58.1-608 of the Code of Virginia. While I am mindful of the worthwhile purpose that the Library serves to the Commonwealth, absent a statutory exemption that would allow the Library to make purchases exempt from the tax, the department has no authority to grant such an exemption.
While libraries that are owned by the state or one of its political subdivisions are exempt from the tax under §58.1-608(18) or the Code of Virginia, other libraries do not enjoy a similar exemption. Senate Bill 127, introduced during the 1988 General Assembly Session, would have exempted purchases of tangible personal property by nonprofit public libraries; however, this bill was carried over to the 1989 General Assembly Session. A copy of the department's Legislative Impact Statement on SB 127 is enclosed.
Therefore, the Library is required to pay the tax on all purchases of tangible personal property to the retailer at the time of purchase. If the retailer is not registered to collect the tax, the Library must report and pay the use tax on a Consumer Use Tax Return, ST-7.
If I can be of further assistance, please contact us.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner