Tax Type
Retail Sales and Use Tax
Description
Sale and Installation of Public School Equipment
Topic
Exemptions
Date Issued
04-01-1992
February 20, 1992
Re: Request for Ruling: Retail Sales & Use Tax &
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- Corporate Income Tax
- Corporate Income Tax
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This will reply to your letter of December 6, 1991 in which you seek an exemption from the sales and use and income taxes for your organization, the**************** the "Taxpayer."
FACTS
The Taxpayer is a nonprofit organization exempt from federal income taxation pursuant to I.R.C. §501(c)(3) and organized to provide career and volunteer chiefs, chief fire officers, and managers of emergency service organizations throughout the international community with the information, education, services, and representation to enhance their professionalism and capabilities to protect citizens from the devastation of fire, environmental, natural and man-made emergencies.
It seeks a ruling on its tax status in Virginia.
RULING
Corporate Income Tax
Virginia Code §58.1-401 and the Virginia Corporation Income Tax Regulation 630-3-401(F) exempt from the state income tax nonprofit corporations which are exempt from federal income tax under I.R.C. 501(c).
Based on the determination by the Internal Revenue Service that the Taxpayer qualifies for exemption from federal income tax under I.R.C. 501(c)(3), and the Virginia Code and regulation sections cited above, the Taxpayer qualifies for exemption from Virginia income tax. However, if the Taxpayer has unrelated business taxable income as defined in Internal Revenue Code §512, it must file a Virginia return and pay Virginia income tax on such income.
Retail Sales and Use Tax
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). 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 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.
With regard to the Taxpayer's qualification for any local tax exemptions, I suggest you contact your local Commissioner of Revenue's office.
If I can be of further assistance, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5814H
Rulings of the Tax Commissioner