Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches; Food and crafts festival
Topic
Taxability of Persons and Transactions
Date Issued
08-12-1994
August 12, 1994
Re: Request for Ruling: Retail Sales and Use Tax
Dear**********
This will respond to your letter of July 29, 1994 in which you seek a ruling on the tax status of sales by various nonprofit organizations at the above-cited event (the "Festival").
FACTS
The Festival is a two-day event in celebration of various commodities famous to Virginia. Both for-profit and nonprofit organizations are engaged in sales at the Festival but food is sold only by nonprofit organizations, and arts, crafts, and similar items are sold only by for-profit entities. The nonprofit organizations participating in the food sales include volunteer fire and rescue squads, churches, social clubs, and the American Red Cross.
You seek a ruling on the tax status of the sales by the nonprofit organizations You also seek information as to how nonprofit organizations may receive a refund of taxes erroneously remitted to the department:.
RULING
I will address the tax status of sales made by the above organizations individually below:
Volunteer Fire Departments and Rescue Squads
Subdivision 1 of Va. Code §58.1-609.8 provides an exemption from the tax for tangible personal property purchased for use or consumption by or sold by a nonprofit volunteer fire department or volunteer rescue squad or auxiliary of such department or squad.
Thus, sales at: the Festival by a nonprofit volunteer rescue squad or fire department are exempt from the tax.
American Red Cross
Sales by the American Red Cross are exempt from the tax under the governmental exemption found in Va. Code §58.1-609.1(4).
Social Clubs, churches and Other Nonprofit Organizations, Generally
Va. Code §58.1-609.10(2) exempts from the sales and use tax an "occasional sale" of tangible personal property. An "occasional sale" is in Virginia Regulation (VR) 630-10-75 as including, "[a] sale by a person who is engaged in sales on three or fewer occasions within one calendar year, except that sales at fairs, flea markets, circuses and carnivals and sales made by peddlers and street vendors are not occasional sales."
Sales by social clubs, churches, and other nonprofit organizations on three or fewer occasions per year qualify as exempt occasional sales. Thus, if the organizations are making occasional sales, they are not required to register and collect/remit the sales tax on their sales of food. However, if a social club, church or other nonprofit organization engages in sales on more than three occasions during the year, it must register as a dealer with the department and collect and remit the tax on all of its sales. As a registered dealer, however, the organization may purchase items for resale exempt of the tax using a resale exemption certificate, Form ST-10.
Refunds
An organization which has previously remitted the tax erroneously collected may seek a refund of taxes paid according to the procedures set: forth in VR 630-1-1820, copy enclosed. See also VR 630-10-89 dealing with the refunding of sales and use tax to dealers, copy enclosed. You should note that refund requests must be filed with the department within three years from the date the tax became due. The necessary information should be forwarded to the department's Taxpayer Assistance Section, Office of Taxpayer Services, P. O. Box 1880, Richmond, Virginia 23282-1880.
If you have any further questions about this, please let me know.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/832lH
Rulings of the Tax Commissioner