Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, Medical educational testing organization
Topic
Taxability of Persons and Transactions
Date Issued
12-12-1995
December 12, 1995
Re: Request for Ruling: Retail Sales and Use Tax
Dear**************:
This will reply to your letter of November 28, 1995, in which you request a ruling on the availability of a retail sales and use tax exemption for the**************(the "Taxpayer").
FACTS
The Taxpayer is a nonprofit medical educational testing organization located in another state. It is exempt from federal income taxation under Internal Revenue Code § 501(c)(3). The organization plans to hold several business meetings in Virginia and requests confirmation that it is exempt from the Virginia retail sales and use tax.
RULING
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 Code of Virginia §§ 58.1-609.1 through 58.1-609.13. The Virginia courts have consistently required strict construction of these exemptions, i.e., where there is any doubt as to the application of an exemption, the doubt is resolved against the one claiming the exemption. Based on the information provided, there is no exemption in § 58.1-609 that would apply to your organization.
While I am mindful of the worthwhile purpose that the Taxpayer serves, absent a statutory exemption that would allow the Taxpayer to make purchases exempt of the tax, the department has no authority to grant such an exemption. Therefore, the Taxpayer is required to pay the tax on tangible personal property used in conducting the business meetings in Virginia. In addition, charges for meals or catering and the rental of meeting space or other rooms in a hotel are subject to the tax. If a vendor is not registered to collect the tax, the Taxpayer must report and pay use tax on a consumer use tax return, Form ST-7.
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 exemption legislation during the 1996 Session of the General Assembly, the questionnaire should be completed and forwarded to the legislator who will sponsor the bill for exemption. The legislator must sign the questionnaire and submit it to the department by December 28, 1995.
If you have any questions regarding this matter, you may contact*********at***************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10624F
Rulings of the Tax Commissioner