Tax Type
Retail Sales and Use Tax
Description
Nonprofit corporation exemption
Topic
Exemptions
Date Issued
09-25-1996
September 25, 1996
Re: Request for Ruling: Retail Sales and Use Tax
Dear**********
This is in reply to your letter of September 9, 1996, in which you request a ruling on the availability of a retail sales and use tax exemption for ******** (the "Taxpayer").
FACTS
The Taxpayer, a nonprofit corporation exempt from federal income taxation under § 501(c)(3) of the Internal Revenue Code, is organized under the Virginia Nonstock Corporation Act exclusively for charitable, religious and educational purposes, including the promotion of religious fellowship among youth and adults. The Taxpayer's membership consists of members of a particular church who desire to associate with the Taxpayer. The Taxpayer is not under the supervision of any congregation, or any group of congregations.
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 §§ 58.1-609.1 through 58.1-609.13 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. Accordingly, the Taxpayer is required to pay the tax to its vendors on all purchases of tangible personal property. 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 1997 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 November 1, 1996.
If you have any questions regarding this matter, you may contact ******of the department's Office of Tax Policy at******** .
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner