Document Number
95-131
Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations; Clinics
Topic
Taxability of Persons and Transactions
Date Issued
05-23-1995
May 23, 1995


Re: Request for Ruling: Sales and Use Tax


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

This will reply to your letter of March 30, 1995 requesting a ruling as to the sales and use tax exemption status for equipment and supplies purchased by *************(the "Taxpayer") for use in nonprofit medical clinics located overseas.
FACTS

The Taxpayer's corporation was formed as the foreign partner in a joint venture to establish medical clinics overseas. The overseas partner to the joint venture is a governmental nonprofit hospital. The clinic is physically located within the nonprofit hospital. The foreign government has classified the hospital as a "good works" project and has exempted the hospital from taxes.

It is the purpose of the Taxpayer, who is located in Virginia, to procure, inspect and/or test, materials, equipment, and supplies for use in the overseas hospital. Such materials, equipment and supplies includes medical equipment, furnishings, medical and administrative supplies, and pharmaceuticals. Once all items have been inspected and/or tested, they are containerized and shipped overseas. The Taxpayer is requesting a sales and use tax exemption under interstate and foreign commerce.
RULING

Code of Virginia §58.1-609.7.4 provides a sales and use tax exemption for tangible personal property for use or consumption by a nonprofit hospital or a nonprofit licensed nursing home. Based on the information provided in your letter, the Taxpayer is a partner in a joint venture with a nonprofit hospital to run a clinic within a nonprofit hospital. Virginia Regulation (VR) 630-10-47 (copy enclosed) addresses hospitals and nursing homes and provides an interpretation to the above referenced statute. Subsection D of this regulation specifically provides that if a clinic is an integral part of a nonprofit hospital, the clinic would enjoy the same sales tax exemption extended to the nonprofit hospital.

Based on all the information provided, I find that tangible personal property purchased for use and consumption by the clinic, would be exempt from the tax. I have enclosed a supply of Exemption Form ST-13's which the Taxpayer may issue to it's suppliers in making such tax exempt purchases. If you should have any further questions, please contact**********Office of Tax Policy, at*************.
                        • Sincerely,


                          Danny M. Payne
                          Tax Commissioner



OTP/9539K

Rulings of the Tax Commissioner

Last Updated 08/25/2014 16:46