Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches
Topic
Taxability of Persons and Transactions
Date Issued
10-11-1996
October 11, 1996
Re: Request for Ruling: Retail Sales and Use Tax
Dear***********
This is in reply to your letter in which you request a retail sales tax exemption for the Virginia office of ****** (the "Taxpayer").
FACTS
The Taxpayer is a nonprofit corporation exempt from federal income taxation under § 501(c)(3) of the Internal Revenue Code. The Taxpayer is organized to do general missionary work and minister to young people through the teaching of skilled trades and scientific agriculture.
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 must 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
OTP/10992F
Rulings of the Tax Commissioner