Tax Type
Retail Sales and Use Tax
Description
Nonprofit criteria
Topic
Exemptions
Date Issued
06-30-1992
June 30, 1992
Re: Request for Ruling: Retail Sales and Use Tax
Dear***************
This will reply to your letter in which you request a ruling on the application of the Virginia sales and use tax on purchases made by the****************(the Taxpayer).
FACTS
The Taxpayer, located in Virginia, is a nonprofit organization exempt from taxation under §501 (c)(3) of the Internal Revenue Code. The Taxpayer is organized to develop and promote interest in the restoration and conservation of wildlife, land, water and other natural resources and actively lobbies the General Assembly to enact legislation promoting the wise use of such resources. The Taxpayer is seeking exemption from the sales and use tax for its purchases under Va. Code §58.1-608(A)(8)(x).
RULING
Va. Code §58.1-608(A)(8)(x) provides an exemption for the following:
-
- [t]angible personal property purchased for use or consumption by a nonprofit organized, exempt from taxation under §501 (c)(3) of the Internal Revenue Code and organized exclusively for the purpose of promoting and supporting conservation and environmental issues throughout the Commonwealth by encouraging the protection and restoration of waters, wildlife and land; safeguarding the public health by eliminating pollution; nurturing and improving wildlife stocks; promoting the highest standards of sportsmanship and strengthening farmer sportsmen understanding; and performing other environmental services.
The department's policy with respect to exemption from the sales and use tax is dictated by the rule of strict construction established by the Virginia courts. The Virginia Supreme Court has consistently held that "exemption from taxation is the exception, and where there is any doubt, the doubt is resolved against the one claiming exemption." See Golden Skillet Corp. v. Commonwealth, 214 Va. 276, 199 S.E.2d 511 (1973).
The Taxpayer does not qualify for exemption from the sales and use tax in this case because its activities are not as comprehensive as those contemplated within the statute. Further, the Taxpayer's activities are restricted to a particular geographic area as opposed to the state as a whole. While I am mindful of the worthwhile purpose the Taxpayer serves, there is no general exemption from Virginia retail sales and use tax for nonprofit organizations. Therefore, 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.
As such, the Taxpayer is required to pay the tax to its retailers on all purchases of tangible personal property. If a retailer is not registered to collect the tax, the Taxpayer must report and pay use tax on a Consumer Use Tax Return, Form ST- 7.
For your information, the exemption provided under
Va. Code §58.1-608(A)(8)(x) will be studied as part of the nonprofit civic and community service grouping in our annual sales and use tax expenditure study issued to the House and Senate Finance Committees of the General Assembly. During the review process an exposure draft of the study be circulated to interested parties. Your organization will be added to the mailing list and we welcome your comments.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5798J
Rulings of the Tax Commissioner