91-25 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Description

Nonprofit organization organized to create development education programs

Topic

Exemptions

Property Subject to Tax

Date Issued

03-11-1991

March 11, 1991

Re: Request for Ruling: Sales and Use Tax

Dear****************

This will reply to your letter of January 8, 1991 in which you request a ruling whether the*************( the "Taxpayer", qualifies for exemption from sales and use tax.

FACTS

The Taxpayer, a nonprofit organization exempt from federal income taxation under Internal Revenue Code § 501(c)(3), was organized to create a development education program about multilateral institutions related to women in developing countries and to provide financial support for various activities benefitting women in their work for nation, regional and global development. You request that if the organization itself does not qualify for exemption, it at least be exempt with respect to its quarterly publications, brochures, reports, and similar printed materials.

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 Va. Code § 58.1-608, copy enclosed. While I am mindful of the worthwhile purpose the Taxpayer serves, absent a statutory exemption that would allow the Taxpayer to make purchases exempt from the tax, the department has no authority to grant such an exemption.

Va. Code § 58.1-608(3)(b)(v) provides that the retail sales and use tax does not apply to:

- equipment, printing or supplies used directly to produce a publication described in subdivision 6 c whether it is ultimately sold at retail or for resale or distribution at no cost.

A publication is "described in subdivision 6 c" as

- [a]ny publication issued daily, or regularly at average intervals not exceeding three months, and advertising supplements and any other printed matter ultimately distributed with or as part of such publications, except that newsstand sales of the same are taxable.

In order to qualify for this exemption, Virginia Regulation 630-10-73, copy enclosed, provides that a publication must be issued daily or at average intervals not exceeding three months and must be a compilation of information available to the general public. A review of the Taxpayer's publication, UNIFEM, reveals that it would qualify for the publication exemption. Thus, purchases of tangible personal property used directly to produce this publication are exempt from the tax. However, tangible personal property purchased for use with the Taxpayer's other printed materials, including brochures, reports, etc., are not exempt.

While you mentioned the Taxpayer's brochures, reports, and similar printed materials possibly qualifying for exemption under Va. Code § 58.1-608(6)(d), please note that this exemption is limited to "[c]atalogs, letters, brochures, reports,...when stored for twelve months or less in the Commonwealth and distributed for use without the Commonwealth." Thus, this exemption does not apply to printed material that is mailed to the Taxpayer's members in Virginia.

If you have any further questions regarding this matter, please contact the department.

Sincerely,

W. H. Forst
Tax Commissioner

Rulings of the Tax Commissioner