Document Number
95-122
Tax Type
Retail Sales and Use Tax
Description
Occasional sales, Seasonal fundraising sales by a charitable organization
Topic
Taxability of Persons and Transactions
Date Issued
05-18-1995
May 18, 1995




Re: Request for Ruling: Retail Sales and Use Tax


Dear*************

This is in response to your letter of May 1, 1995 in which you seek a written guideline on the application of the tax to sales made by the *****************(the Taxpayer).
FACTS

The Taxpayer is the auxiliary arm of a major nonprofit charitable organization which is exempt from federal taxation under Internal Revenue Code §501(c)(3). As a fundraising activity, the Taxpayer sells Christmas ornaments and is looking to expand its marketing of these ornaments. I understand from a discussion you had with my Office of Tax Policy that these sales take place throughout the autumn season and at various locations, including the retail outlets operated by the parent organization.
RULING

Code of Virginia § 58.1-603 imposes the sales tax on "each item or article of tangible personal property when sold at retail ... in this Commonwealth." However, as indicted in Virginia Regulation 630-10-75:
    • The tax does, not apply to an occasional sale provided the sale is not one of a series of sales ... sufficient in number, scope and character to constitute an activity requiring the holding of a certificate of exemption.
As further noted in the regulation, and as discussed in the enclosed Public Document 90-40 (3/19/90), the occasional sale exemption applies to organizations which are engaged in sales on three or fewer occasions within a calendar year. In such instances, the organization is not required to register with the department and collect the tax on its sales.

In your case, however, sales are made for an extended period of time and are made at multiple locations. As indicated in P.D. 89-173 (5124189) and 90-39 (3/19/90), such sales are "sufficient in number, scope and character" requiring the organization to collect the tax.

Accordingly, based on the information before me, the Taxpayer is required to register with the department and to collect and remit the tax on its fundraising sales. To this end I have enclosed a registration application and instructions. However, the Taxpayer may apply for a seasonal registration and thus file returns only for those autumn months in which the fundraising sales are conducted.

Furthermore, as a registered dealer, the Taxpayer may purchase exempt of the tax those items which it purchases for resale. This is done by providing your suppliers with a fully completed Certificate of Exemption, Form ST-10. I have enclosed a number of these forms, and the Taxpayer may begin using them when it receives its certificate of registration number.

I hope this information is useful. Please contact*********in my Office of Tax Policy at*********if you have additional questions or need any further assistance.
                        • Sincerely,


                          Danny M. Payne
                          Tax Commissioner



OTP/9656I

Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46