Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization; Exemption criteria strictly construed
Topic
Exemptions
Date Issued
02-05-1993
February 5, 1993
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This will reply to your letter of August 12, 1991 in which you request a ruling regarding the eligibility of ***** (the "Taxpayer") for an exemption from the sales and use tax.
FACTS
The Taxpayer, exempt from income taxation under §501(c)(3) of the Internal Revenue Code, is organized to promote the acquisition, development or preservation of affordable housing for needy persons by complementing the programs, initiatives, and goals of federal, state and local government agencies and instrumentalities. The Taxpayer is seeking an exemption from the sales and use tax for purchases of tangible personal property.
DETERMINATION
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 Va. 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.
It should be noted that the Taxpayer may be eligible for a refund of sales and use tax paid pursuant to Va. Code §58.1-608.1 (copy enclosed). This refund provision expires July 1, 1993, but legislation is currently pending to extend the program.
If I can be of further assistance, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/5562F
Rulings of the Tax Commissioner