Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization; Wildlife conservation; Exemption criteria
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
04-08-1992
April 8, 1992
Re: Request for Ruling: Retail Sales and Use Tax
Dear******************
This will reply to your letter of December 5, 1991 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, headquartered without Virginia, is a nonprofit organization exempt from taxation under §501(c)(3) of the Internal Revenue Code and classified as a publicly supported charity under §509(a)(1) and §170(b)(1)(A)(vi). The Taxpayer, which operates facilities within Virginia, is a national organization comprised of state affiliates operating throughout the United States, Puerto Rico and the District of Columbia, and is organized to develop and promote interest in the restoration, wise use, conservation and scientific management of wildlife and other natural resources among agencies, societies, clubs and individuals. The Taxpayer is seeking exemption from the sales and use tax for its purchases under Va. Code §58.1-608(A)(8)(x) and §58.1-608(A)(9)(h).
RULING
The exemption set forth in Va. Code §58.1-608(A)(8)(x) renders exemption from the sales and use tax for the Taxpayer's state affiliated organization. The statute provides in pertinent part that the taxpayer must be "organized exclusively for the purpose of promoting and supporting conservation and environmental issues throughout the Commonwealth..."
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 wording in the statute was intended to strictly construe this exemption for the state affiliate and therefore does not extend to the Taxpayer as it is not organized exclusively to promote conservation throughout Virginia.
Further, Va. Code §58.1-608(A)(9)(h) provides an exemption for the following:
-
- [t]angible personal property purchased for use or consumption by a nonprofit cultural organization, exempt from taxation under §501(c)(3) of the Internal Revenue Code, which educates children about the arts, humanities and nature on a regular basis through museum exhibits, classes and performances.
- [t]angible personal property purchased for use or consumption by a nonprofit cultural organization, exempt from taxation under §501(c)(3) of the Internal Revenue Code, which educates children about the arts, humanities and nature on a regular basis through museum exhibits, classes and performances.
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 will be circulated to interested parties. Your organization will be added to the mailing list and we welcome your comments.
If you have any further questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5796J
Rulings of the Tax Commissioner