Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches; Church operated swimming pool
Topic
Taxability of Persons and Transactions
Date Issued
09-29-1993
September 29, 1993
Re: Request for Ruling: Retail Sales and Use Tax
Dear**************
This will reply to your letter of July 28, 1992 in which you request a ruling regarding the application of sales and use tax to sales by ***** the "Church".
FACTS
The Church maintains a swimming pool and concession stand on land adjacent to the church site for Catholic parishioners. The Church purchases and pays tax on items such as chips, candy, ice cream, hamburgers, hot dogs and sodas for sale to members who patronize the pool facility. The Church requests clarification of its sales tax exempt status in light of its operation of the pool facility.
Additionally, the Church requests such clarification as a basis to qualify for exemption from the required local meals tax.
RULING
Retail sales tax
Virginia Regulation (VR) 630-10-22.1, copy enclosed, interprets the church exemption set forth in Va. Code §58.1-609.8(2). The regulation contains a proviso under section D which states that the exemption does not extend to sales by nonprofit churches. However, the department has allowed churches, in certain cases where sales were limited in scope (e.g. weekly church suppers) to pay tax to their suppliers. Since the operation of the pool facility is not profit motivated and the facility serves a designated group of parishioners, the Church is not required to register as a dealer and collect the sales tax.
The Church shall continue to pay tax to its suppliers at the time of purchase for tangible personal property used in the operation of the pool facility. Should the Church expand or change the nature of the pool facility operation in the future, it is required to obtain a ruling from the department based on the new facts.
Local meals tax
Localities are authorized to impose local taxes on meals pursuant to Va. Code §58.1-3833, copy enclosed. While many localities piggyback the retail sales and use tax for ease of administration of the meals and other local taxes, this is strictly voluntary. Therefore, you should contact your local Commissioner of Revenue to obtain verification regarding the application of the local meals tax to your activities.
If you have additional questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6322J
Rulings of the Tax Commissioner