Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches; Campground facilities
Topic
Taxability of Persons and Transactions
Date Issued
08-04-1993
August 4, 1993
Re: Request for Ruling: Retail Sales and Use Tax
Dear***********
This will reply to your letters of April 7, 1993 and June 28, 1993 in which you request a ruling regarding the application of the Virginia Retail Sales and Use Tax to*********** (the "Taxpayer").
FACTS
The Taxpayer operates a campground in Virginia with canoeing and tubing facilities. On occasion, the Taxpayer serves groups from schools, churches and the Boy and Girl Scouts. These groups often present various sales tax exemption certificates when making purchases. You ask several questions regarding the application of the tax and the proper handling of the exemption certificates.
I will address the issues in the order they are raised in your letter.
RULING
Generally: Va. Code §58.1-623 provides that all sales of tangible personal property are subject to the sales and use tax until the contrary is established. The burden of proving that the tax does not apply rests with the dealer unless he takes, in good faith from the purchaser, a certificate of exemption indicating that the property is exempt under the law.
Boy and Girl Scout Groups: Purchases for use or consumption by an individual scout troop will qualify for the exemption under Va. Code §58.1-608(A)(8)(n). The troop must present Certificate of Exemption form ST-13 to make purchases of tangible personal property for the organization's use or consumption exempt from the tax. However, the exemption is limited to purchases of tangible personal property by the troop itself and not to purchases by individual troop leaders or members. Accordingly, purchases must be made from the troop's funds in order for the exemption to apply.
It should be noted that, even if paid from the troop's funds, the purchase of campground accommodations are not exempt from the tax, as these are not considered to be "used or consumed" by the troop, but rather by individual members.
Church Groups: Va. Code §58.1-608(A)(8)(b) exempts from tax certain tangible personal property when purchased by a nonprofit church for use in carrying on the work of the church. The exemption is limited to property used inside public church buildings. Therefore, the church exemption would not be applicable in the situation you describe, and all purchases of tangible personal property by church groups and their members would be subject to the tax.
College and High School Groups: The exemption for schools, colleges and institutions of learning under Va. Code §58.1608(A)(4)(b) applies only to purchases of tangible personal property for the use and consumption of such institutions of learning paid with their own funds. Purchases of tangible personal property paid for out of funds other than school funds are taxable. However, the tax does not apply to purchases of tangible personal property by a school to be paid out of school activity funds if the purchases become the property of the school.
As with the Boy and Girl Scouts discussed above, the purchase of campground accommodations are not exempt, as these are not considered to be "used or consumed" by the school group.
Out-of-State Groups: Exemption certificates with an out-of-state tax number are not accepted in Virginia. In order to purchase items exempt from the sales tax, out-of-state groups must be exempt from the tax under Virginia law.
Taxpayer's Purchases for Resale: When the Taxpayer makes purchases for resale, such purchases are exempt from sales tax if the Taxpayer presents a valid resale exemption certificate, Form ST-10 (copy enclosed), at the time of purchase. The form must include the Taxpayer's sales tax registration number. The taxability of purchases for resale made out-of-state is determined by the laws of that state.
It should be noted, however, that Va. Code §58.1-623.C. imposes the tax upon any dealer who makes any use of tangible personal property purchased under an exemption certificate "other than an exempt use or retention, demonstration, or display while holding property for resale."
I hope this answers your questions. Should you have any additional questions, please contact the department.
Sincerely,
W. H Forst
Tax Commissioner
OTP/6898F
Rulings of the Tax Commissioner