Tax Type
Retail Sales and Use Tax
Description
Ecological Organizations; Criteria for Exemption
Topic
Taxability of Persons and Transactions
Date Issued
04-27-1992
April 27, 1992.
Re: Sales & Use Tax
Dear****************
This will reply to your letter of November 11, 1991 in which you request a ruling as to the application of the Virginia retail sales and use tax to * * * (the Taxpayer).
FACTS
The Taxpayer is a nonprofit organization exempt from federal taxation under §501(C)(3) of the Internal Revenue Code. The Taxpayer is organized to function as a * * *. The Taxpayer is organized for the purpose of protecting plants and animals and their habitats; protecting plants and animals from pollution, radiation, and toxic substances; further the wise use of land and water; seek solutions to global problems caused by overpopulation and depletion of natural resources; and, to promote energy development which stresses conservation and renewable sources. The Taxpayer is seeking sales and use tax exemption under Va. Code §58.1-608(A)(8)(x).
RULING
Va. Code §58.1-608[(A)](8)(x) provides a sales and use tax exemption for the following:
Tangible personal property purchased for use or consumption by a nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code and organized exclusively for the purposes 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 standard of sportsmanship and strengthening farmer sportsmen understanding; and performing other environmental services.
To qualify for the above exemption, an organization must meet all of the criteria set forth above. Although the Taxpayer meets some of the criteria above, its overall focus is substantially narrower than that of the organization for which the exemption was enacted. Therefore, based upon the doctrine of strict construction adopted by the Virginia courts in interpreting sales tax exemptions, the Taxpayer does not qualify for the exemption.
Notwithstanding the worthwhile purpose the Taxpayer serves, absent a statutory exemption that would allow it to make purchases exempt of the tax, the department has no authority to grant an exemption to the taxpayer. Therefore, the Taxpayer is required to pay the tax to the retailer 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 tax on a Consumer Use Tax Return, Form ST-7 (copy enclosed).
If you should have any questions, please feel free to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner