Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches; Teaching materials used at religious conferences/retreats
Topic
Taxability of Persons and Transactions
Date Issued
08-29-1996
August 29, 1996
Re: § 58.1-1821 Application: Retail Sales and Use Tax
Dear*************
This will reply to your letter in which you seek correction of a sales and use tax assessment to ********* (the Taxpayer) for the period July 1992 through May 1995.
FACTS
The Taxpayer, a nonprofit organization exempt form federal taxation under § 501 (C)(3) of the Internal Revenue Code, serves as an auxiliary to the
The Taxpayer operates numerous ministries and programs primarily involved in training/teaching activities for missions within the state. In addition, the Taxpayer operates a camp which is used primarily for conferences and retreats. The Taxpayer takes exception to three items held taxable in the audit and contends they are exempt teaching and training materials.
DETERMINATION
Code of Virginia § 58.1-609.8(2) provides, in part, an exemption for "[f]ood, disposable serving items, cleaning supplies and teaching materials used in the operation of camps or conference centers by the church or an organization composed of churches that are exempt under this subdivision and which are used in carrying out the work of the church or churches."
Based on the above statute, the purchase of teaching materials is exempt from the tax, provided such items are used or consumed in carrying out the work of the church and are not being utilized during nonchurch related functions.
In this case, the Taxpayer is an organization composed of exempt churches. Thus, the purchase of food, cleaning supplies, disposable serving items, and teaching materials are exempt from the tax when used by the Taxpayer in carrying out the work of its member churches. The exemption does not apply to nonchurch related functions.
Sound equipment
It is my understanding that this equipment is used for providing a hearing assistance system for use during religious teaching/training conferences and retreats. As the sound equipment is used in carrying out the work of the ministry, it is exempt from the tax. Accordingly, the audit will be adjusted to remove this item from the assessment.
Projector and presentation board
In a conversation with one of my staff members, you indicate that the overhead projectors and presentation board are used in the performance of religious teaching and training activities at conferences and camp retreats. Based on the information provided by the Taxpayer, these items are exempt teaching materials and will be removed from the assessment.
As the assessment has been paid in full, with the exception of the contested issues, the remaining balance of the assessment will be abated. Should you have any questions regarding this letter, please contact********* in my Office of Tax Policy at ***************.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10512T
Rulings of the Tax Commissioner