Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches; Music appreciation group
Topic
Taxability of Persons and Transactions
Date Issued
11-14-1996
November 14, 1996
Re: Request for Ruling: Retail Sales and Use Tax
Dear********************
This is in reply to your letter of October 3, 1996 to **** of the department's**** District Office. In your letter, you request a ruling on the availability of a retail sales and use tax exemption for *******(the "Taxpayer"). ******** has forwarded your letter to me for response.
FACTS
The Taxpayer is a nonprofit arts-in-education organization which brings professional musicians, dancers, actors, and storytellers into schools and youth organizations throughout Virginia. The Taxpayer is organized to: (1) stimulate interest and to promote the musical education of school-age children; (2) develop more appreciative musical audiences for the future; (3) encourage the formation and continuance of high quality music ensembles; and (4) perform all acts necessary for the proper and successful prosecution of the ultimate purposes for which the organization is created.
You request a ruling that the Taxpayer is exempt from the Virginia retail sales and use tax under Code of Virginia § 58.1-609.9(8).
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. 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. See Golden Skillet Corporation v. Commonwealth, 214 Va. 276, 199 S.E.2d 511 (1973).
The exemption which you cite, Code of Virginia § 58.1-609.9(8), applies to "[t]angible personal property purchased for use or consumption by a nonprofit cultural organization, exempt from taxation under § 501 (c)(3) of the Internal Revenue Code, which educates children about the arts, humanities and nature on a regular basis through museum exhibits, classes and performances." [Emphasis added.] Based on the information provided, the Taxpayer does not provide educational experiences to children in all the areas or through all the methods outlined in the statute. There is no indication that the Taxpayer educates children about nature. Furthermore, it does not appear that the Taxpayer utilizes museum exhibits in its educational programs. The exemption, therefore, is inapplicable under the doctrine of strict construction.
While I am mindful of the worthwhile purposes the Taxpayer serves, based on the information provided, I find that the Taxpayer does not satisfy the necessary criteria for exemption under Code of Virginia § 58.1-609.9(8). 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. The Taxpayer is required to pay tax to its retailers on all purchases of tangible personal property. If a retailer is not registered, the Taxpayer must remit the tax on the consumer use tax return, Form ST-7.
If you have any questions regarding this ruling, you may contact*****of the department's Office of Tax Policy at*********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/11772F
Rulings of the Tax Commissioner