Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches; Automotive parts
Topic
Taxability of Persons and Transactions
Date Issued
03-27-1995
March 27, 1995
Re: Request for Ruling: Retail Sales & Use Tax
Dear**********
This will reply to your letter of February 10, 1995 in which you request a ruling on the application of the tax to the purchase of automotive parts by ******** ("the Church").
FACTS
The Church has a fleet of vehicles used exclusively for church related activities. The maintenance work on these vehicles is performed in the basement garage of the church building. You seek an exemption from the tax for automotive parts purchased for use in these vehicles based on the reasoning that the parts are used in the church building for purposes of carrying out the work of the church.
RULING
Code of Virginia §58.1-609.8(2) exempts from the sales and use tax "[t]angible personal property...purchased by churches...for use (i) in religious worship services by a congregation of church membership while meeting together in a single location, and (ii) in the libraries, offices, meeting or counseling rooms or other rooms in the public church building used in carrying out the work of the church and its related ministries..." .
Virginia Regulation (VR) 630-10-22.1 interprets the church exemption and provides an exemplary listing of taxable and exempt purchases for nonprofit churches. While the exemption is broad in its application, it does not apply to all tangible personal property purchased by churches.
Section D of VR 630-10-22.1 specifically provides that repair parts, accessories, oil and similar items for use in motor vehicles are taxable when purchased by churches. (Copy enclosed)
The department's regulation is based upon a mandate by the Virginia courts that all sales and use tax exemptions are to be strictly construed, i.e., where there is doubt as to the applicability of an exemption, the exemption must be denied. As noted above, the law does not exempt all property used within a public building. Rather, it exempts property used in the rooms of a public church building which are used in carrying out the work of the church.
Although I understand your argument, the rule of strict construction prevents the department from granting the exemption. Consequently, your church must continue to pay tax to its suppliers (or pay use tax directly to the department) on purchases of automotive parts and supplies. I regret that I cannot respond more favorably, but if you have any further questions, please feel free to contact*************.
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- Sincerely,
Danny M. Payne
Tax Commissioner
- Sincerely,
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OTP/9348T
Rulings of the Tax Commissioner