Tax Type
Retail Sales and Use Tax
Description
Nonprofit rehabilitating housing for the elderly, handicapped or poor
Topic
Exemptions
Date Issued
09-21-1990
September 21, 1990
Re: Request for Ruling/ Sales and Use Tax
Dear *************
This will reply to your letter of June 4, 1990 in which you request a ruling whether your organization qualifies for exemption from the sales and use tax.
FACTS
************** ("the Taxpayer") is a nonprofit organization exempt from income taxation under §501(c)(3) of the Internal Revenue Code. The Taxpayer's activities include a program which sets aside one day a year for volunteers in a community to come together and rehabilitate housing for the elderly, handicapped or poor. The Taxpayer also operates a shelter for homeless individuals. The Taxpayer is seeking an exemption from the sales and use tax for its purchases of tangible personal property.
RULING
There is no general exemption from the Virginia retail sales and use tax for nonprofit organizations. The only exemptions from the tax are set out in Virginia Code §58.1-608. Absent a statutory exemption that would allow the Taxpayer to make purchases exempt of the tax, the department has no authority to grant such an exemption.
§58.1-608.1(B) of the Code of Virginia provides that:
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- ..[A]n organization exempt from taxation under 501(c)(3) of the Internal Revenue Code may apply for a refund of any sales and use tax paid on tangible personal property used to repair or rehabilitate homes owned and occupied by low-income persons who could not otherwise afford to finance the rehabilitation or repair of their homes.
Further, §58.1-608.8(1) of the Virginia Code provides an exemption from the sales and use tax for:
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- Tangible Personal property purchased for use or consumption by a shelter for homeless individuals operated by an organization exempt from taxation Pursuant to §501(c)(3) of the Internal Revenue Code, or tangible personal property purchased for use or consumption by a §501(c)(3) organization that is organized exclusively for the purpose of providing food, shelter, clothing or other items to homeless persons in the Commonwealth. Emphasis added.
Based on the above authorities and documentation you have provided, I find that the Taxpayer qualifies for the refunds cited above and exemption from the tax for tangible personal property purchased exclusively for use or consumption by the Taxpayer's shelter for homeless individuals. Requests for refunds of the sales and use tax paid on the property purchased to repair or rehabilitate the eligible homes should be directed to the department's Taxpayer Assistance Section, Office Services Division, P.O. Box 6L, Richmond, VA 23282. A copy of this letter and the applicable receipts should accompany the request.
The Taxpayer must furnish its suppliers with a completed certificate of exemption (Form ST-13), copy enclosed, to purchase exempt of the tax tangible personal property for use or consumption exclusively by the Taxpayer's shelter for homeless individuals. Purchases of tangible personal property for use in the Taxpayer's other activities, such as the University Gardens, tenant organizing and advocacy, and community land trust projects, will be subject to the tax.
If you have additional questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner