Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization; Criteria for exemption
Topic
Exemptions
Date Issued
11-07-1995
November 7, 1995
Re: Request for Ruling: Retail Sales and Use Tax
Dear***********
This is in response to your letter of October 19, 1995 and your prior contact with the department regarding the application of the tax to**************(the "Taxpayer").
FACTS
The Taxpayer is a nonprofit organization which is exempt from federal taxation under § 501(c)(3) of the Internal Revenue Code. The Taxpayer was founded in 1956 to enhance international understanding and friendship through educational and cultural activities. These activities include homestay exchanges, international travel and study programs for students and professionals, international conferences and guest speaker programs with foreign leaders.
The Taxpayer is headquartered in*********but has a chapter in Washington, D.C. and has recently opened an office in Virginia which will liaise with other nonprofit educational organizations which are located in the Commonwealth.
RULING
There are no general exemptions from the Virginia sales and use tax for nonprofit organizations. The only exemptions are those set out in Code of Virginia §§ 58.1-609.1 through 58.1-609.10, and I understand that copies of these statutes were sent to you by a member of my staff.
A review of the applicable statutes indicates that there are currently no exemptions for organizations such as the Taxpayer. Lacking a statutory exemption, the department has no authority to grant an exemption. Accordingly, the Taxpayer is required to pay the tax on its purchases of tangible personal property. If the Taxpayer's vendors do not collect the tax, the Taxpayer must report and pay the tax on a Consumer Use Tax Return, Form ST-7.
Notwithstanding the above, even those nonprofit organizations which do not enjoy a statutory exemption may be exempt on purchases of brochures, fund raising materials and certain other printing for distribution outside of Virginia pursuant to § 58.1-609.6(4). Also, see § 58.1-609.6(3) which exempts purchases made in connection with producing publications which are available at intervals not exceeding three months.
Enclosed is a questionnaire for legislative consideration of a sales and use tax exemption request and Tax Bulletin 94-13 which explains the procedure and information required. If you are interested in pursuing legislation which would provide an exemption for the Taxpayer, the questionnaire should be completed and forwarded to the legislator who will sponsor the bill for exemption. The legislator should sign the questionnaire and submit it to the department as soon as possible but no later than December 1, 1995.
I trust that the foregoing and the enclosed information is helpful. If you have any questions regarding this issue, please contact**********at********.
Sincerely.
Danny M. Payne
Tax Commissioner
OTP/10394I
Rulings of the Tax Commissioner