Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches; Provider of continuing medical education programs
Topic
Taxability of Persons and Transactions
Date Issued
05-03-1996
May 3, 1996
Re: Request for Ruling: Retail Sales and Use Tax
Dear*********
This is in reply to your letter of November 28, 1995 in which you seek exemption from the retail sales and use tax for the
FACTS
****************is a nonprofit corporation created in 1976 pursuant to Public Law 94-361.***** collaborates with the *****a joint institute of the Departments of the Army, Navy, and the Air Force, to provide continuing medical education programs. ***********acts as a fiscal agent and manages certain contracts between **********and the civilian medical profession. Such contracts are for the purpose of writing, editing, printing, and publishing written works on tumor pathology, atlases, and other medical material.
******** functions as an entity of the federal government subject to the authority of the Secretary of Defense. ***** is not an agency or establishment of the federal government.
RULING
There is no general exemption from the 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 58.1-609.10 (copy enclosed). 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 presented, *************does not qualify for the government exemption in § 58.1-609.1(4) as Public Law 94-361 specifically forbids classification as a government agency. Further, does not qualify for exemption under the educational or medical exemptions, 58.1-609.4 and 58.1-609.7, respectively. While I am mindful of the worthwhile purpose that serves, absent a statutory exemption that would allow to make purchases exempt of the tax, the department has no authority to grant such an exemption. **** therefore, should continue to pay the tax to its vendors on all purchases of tangible personal property. If a vendor is not registered to collect the tax, must report and pay use tax on a Consumer's 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 legislation during the 1997 General Assembly Session, the questionnaire should be completed and forwarded to a legislator who will sponsor the exemption bill. The legislator must sign the questionnaire and submit it to the department by November 1, 1996.
If you have any questions concerning this matter, you may contact **********at*****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/10627J
Rulings of the Tax Commissioner