Tax Type
Retail Sales and Use Tax
Description
Drug abuse center; Nonprofit organization; Exemptions strictly construed
Topic
Exemptions
Property Subject to Tax
Date Issued
01-11-1993
January 11, 1993
Re: Request for Ruling: Retail Sales and Use Tax
Dear ****
This will reply to your letter of November 25, 1992 in which you request a ruling on the application of the Virginia sales and use tax on purchases made by your nonprofit organization.
FACTS
***** (The Taxpayer), an organization exempt from income taxation under §501(c)(3) of the Internal Revenue Code, treats individuals for alcohol and drug abuse problems. The Taxpayer operates a 20-bed residential inpatient facility as well as an outpatient counseling service.
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). I am mindful of the worthwhile purpose that the Taxpayer serves, absent a exemption that would 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.
If you have any questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
OTP/6570I
Rulings of the Tax Commissioner