Tax Type
Retail Sales and Use Tax
Description
Environmental organization; Exemption criteria
Topic
Exemptions
Date Issued
06-28-1991
June 28, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear******************
This will reply to your letter of May 1, 1991 in which you seek exemption from the retail sales and use tax for the**************(the "Taxpayer") under Va. Code §58.1-608(8)(x) effective July 1, 1991.
FACTS
The Taxpayer is a local chapter of a nationally known environmental organization which is exempt from federal income taxation pursuant to Internal Revenue Code §501(c)(4) and organized to explore, enjoy and protect the wild places of the earth, to practice and promote the responsible use of the earth's ecosystems and resources, and to educate and enlist humanity to protect and restore the quality of the natural and human environment. It is actively involved in lobbying for such purposes.
You seek exemption from the tax under Va. Code §58.1-608(8)(x) which will become effective July 1, 1991.
RULING
Virginia law does not provide a general exemption from the sales and use tax for nonprofit organizations. The only exemptions from the tax are set out in Va. Code §58.1-608.
Effective July 1, 1991 through June 30, 1993, Va. Code §58.1-608(8)(x) will provide an exemption from the sales and use tax for:
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- tangible personal property purchased for use or consumption by a nonprofit organization exempt from taxation under §501 (c)(3) of the Internal Revenue Code and organized exclusively for the purpose of promoting and supporting conservation and environmental issues throughout the Commonwealth by encouraging the protection and restoration of waters, wildlife and land; safeguarding the public health by eliminating pollution; nurturing and improving wildlife stocks; promoting the highest standards of sportsmanship and strengthening farmer sportsmen understanding; and performing other environmental services. (Emphasis added)
Under principles established by the courts, taxation is the rule and exemption is the exception. Therefore, exemptions from the sales and use tax are strictly construed.
To qualify for an exemption, an organization must meet all of the enumerated criteria.
Based upon review of the information you have provided and applying the rule of narrow construction for exemptions from taxation, the Taxpayer does not meet all of the necessary criteria for exemption under Va. Code §58.1-608(8)(x), nor does it qualify for the other environmental exemption from the sales tax found in Va. Code §58.1-608(9)(I) which provides an exemption for:
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- [t]angible personal property purchased for use or consumption by a national and international, nonprofit, scientific, and educational organization exempt from taxation under §501(c)(3) of the Internal Revenue Code whose resources are devoted to preserving ecologically significant areas in order to safeguard rare or endangered species or critical natural habitats.
I regret that I am not able to provide you with a more favorable response. If you have additional questions or if we may be of any further assistance, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner