Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization; Eastern Shore
Topic
Exemptions
Property Subject to Tax
Date Issued
06-25-1992
June 25, 1992
Re: Request for Ruling: Retail Sales and Use Tax
Dear***************
This is in reply to your letter dated June 1, 1992, and to ********* letter dated May 5, 1992, in which you request a ruling whether your organization qualifies for exemption from the sales and use tax.
FACTS
(the Taxpayer) is a nonprofit organization exempt from income taxation under §501(c)(3) of the Internal Revenue Code. It is organized to promote means, equipment, facilities and opportunities for the education of the public respect to the study, culture, enjoyment and utilization of the visual and performing arts, to assist public and parochial schools and the colleges on the Eastern Shore of Virginia in promoting and developing art education and appreciation programs, and to assist other visual and performing arts organizations within the community. You seek an exemption to allow the Taxpayer to purchase items exempt from the Virginia retail 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 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.
Va. Code §58.1-608(A)(9)(k) provides an exemption for tangible personal property purchased for use or consumption by a nonprofit organization which coordinates and promotes art in the Roanoke Valley. However, based upon the doctrine of strict construction adopted by the Virginia courts in interpreting statutory sales tax exemptions, the Taxpayer is not eligible for this exemption since it does not have activities in the Roanoke Valley.
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.
If I can be of further assistance, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/6195N
Rulings of the Tax Commissioner