91-299 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Description

Nonprofit organization; Fundraising activities

Topic

Exemptions

Property Subject to Tax

Date Issued

11-22-1991

November 22, 1991

Re: Request for Ruling: Retail Sales and Use Tax

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

This will reply to your letter of August 7, 1991 in which you request a ruling on the application of sales and use tax to purchases and sales made by *************** (the Club).

FACTS

The Club is a nonprofit organization engaged in a variety of humanitarian and civic activities and as such requests an exemption from sales and use tax with regard to its fundraising activities.

RULING

There is no general exemption from Virginia Retail Sales and Use Tax for nonprofit organizations. The only exemptions are set out in Va. Code §58.1-608. 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.

However, Va. Code §58.1-608(A)(10)(b) exempts from the sales and use tax occasional sales of tangible personal property. Interpreting the above cite, Virginia Regulation (VR) 630-10-75 provides that:

- The tax does not apply to an occasional sale provided the sale or exchange is not one of a series of sales or exchanges sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of registration.

- The term "occasional sale" means...[a] sale by a person who is engaged in sales on three or fewer separate occasions within one calendar year...

In this case, an organization such as the Club would not be required to register and collect the tax provided that it conducts three or fewer sales per year. However, registration would be necessary if the Club conducted sales on more than three occasions during the year or made regular sales on a seasonal basis.

I hope the foregoing has responded to your inquiry. If you have additional questions please contact the department.

Sincerely,

W. H. Forst
Tax Commissioner

TPD/5475J

Rulings of the Tax Commissioner