Tax Type
Retail Sales and Use Tax
Description
Property purchased by churches; Conference center
Topic
Taxability of Persons and Transactions
Date Issued
04-28-1992
April 28, 1992
Re: §58.1-1821 Application: Retail Sales and Use Tax
Dear ****
This will reply to your letter of May 14, 1991 in which you seek correction of a sales and use tax assessment for the **** (the Taxpayer). Additionally, the Taxpayer files a protective claim for tax paid on items found to be exempt.
FACTS
The Taxpayer is an agency of the **** an organization of **** churches exempt from federal taxation under §501(C)(3) of the Internal Revenue Code. The Taxpayer organizes and coordinates all the foreign missionary activities of the **** in 123 foreign countries. The Taxpayer owns and operates a **** to provide teaching and training for individuals becoming missionaries. Additionally, the Center is used to "debrief" missionaries and their families returning from the missions. The Taxpayer contests the assessment of tax on purchases on the basis the Center is exempt from the tax as a conference center under Va. Code §58.1-608(A)(8)(b). The Taxpayer also files a protective claim for any tax paid on items found to qualify for an exemption.
DETERMINATION
Va. Code §58.1-608(A)(8)(b) provides in pertinent part an exemption for "[f]ood, disposable serving items, cleaning supplies and teaching materials used in the operation of camps or conference centers by the church or an organization composed of churches that are exempt under this subdivision and which are used in carrying out the work of the church or churches." In the present case, the Center is a conference center operated by the Taxpayer as part of the **** an organization composed of exempt churches. Thus, purchases of food, cleaning supplies, disposable serving items, and teaching materials are exempt from the tax when used by the Center in carrying out the work of the Taxpayer or its member churches. The exemption does not apply to nonchurch related functions.
The audit will be revised in accordance with the determination reached in this letter and a revised Notice of Assessment will be sent to the Taxpayer under separate cover.
The Taxpayer may apply for a refund for any tax paid on purchases of food, disposable service items, cleaning supplies and teaching materials used in the church related operation of the Center. Refunds will be limited to the three year statute of limitation period, beginning on April 1, 1988 in the present case. Supporting documentation may be sent with a request for refund to the department's Office Service Division, Taxpayer Assistance Section, P.O. Box 6-L, Richmond, Virginia 23282.
If you have any further questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
TPD/5204I
Rulings of the Tax Commissioner