Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization; Christian drug and alcohol program; Exemption criteria
Topic
Exemptions
Property Subject to Tax
Date Issued
05-06-1991
May 6, 1991
Re: Request for Ruling: Sales and Use Tax
Dear***************
This will reply to your letter of February 6, 1991, in which you request a ruling as to whether your organization qualifies for exemption from the sales and use tax.
FACTS
*********(the "Taxpayer"), a nonprofit organization exempt from income taxation under §501(c)(3) of the Internal Revenue Code, is a residential Christian drug and alcohol program for teenage boys between the ages of 13 and 17. The purpose of the organization is to preach to young people with life controlling problems, i.e. drugs and alcohol, and to teach them to apply Biblically sound principles to their everyday lives. The program is fourteen months in length during which time the youth participate in Christian discipleship classes, support groups and individual counseling. While participating in the fourteen month program, the youth also participate in self-contained, self-instructional academic courses for which they can earn credits towards a high school diploma. These courses are self-taught and allow the youth to complete the course at their own individual pace. The Taxpayer is seeking a sales and use tax exemption for the organization.
RULING
There is no general exemption from the Virginia retail sales and use tax for nonprofit organizations ( see Virginia Regulation (VR) §630-10-74). 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 that 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.
Therefore, the Taxpayer is required to pay the retailer on all purchases of tangible personal property if the retailer is registered to collect the tax. If the retailer is not registered to collect the tax, the Taxpayer must report and pay the use tax on a Consumer Use Tax Return, Form ST-7.
If you should have any further questions, please feel free to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner