Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization providing soup kitchen
Topic
Exemptions
Property Subject to Tax
Date Issued
01-08-1992
January 8, 1992
Re: Request for Ruling: Sales & Use Tax
Dear************************
This will reply to your letter of December 19, 1991 in which you seek a ruling on whether the **********(the "Taxpayer") qualifies for exemption from the sales and use tax.
FACTS
The Taxpayer, a nonprofit organization exempt from federal income taxation pursuant to I.R.C. §501(c)(3), was organized to provide a soup kitchen where the poor can be fed one meal a day at no cost and find shelter for a portion of the day, and to make the soup kitchen a place of ministry to the poor.
It seeks exemption from the sales and use tax.
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 (copy enclosed). In addition, under the principles established by the courts, taxation is the rule and exemption is the exception. Therefore, the exemptions from the sales and use tax are strictly construed.
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.
Therefore, the Taxpayer is required to pay the tax to 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, copy enclosed.
I regret that I am unable to provide you with a more favorable reply. If we may be of any further assistance to you, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5845H
Rulings of the Tax Commissioner