Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, private schools, and churches; Volunteer recruiting
Topic
Taxability of Persons and Transactions
Date Issued
08-27-1997
August 27, 1997
Re: Request for Ruling: Retail Sales and Use Tax
Dear***********
This will reply to your letter of April 4, 1997 in which you request an exemption from Virginia sales and use taxes on behalf of the ********* (the "Center"). I apologize for the delay in responding to your request.
FACTS
The Center is a nonprofit organization that is exempt from federal taxation under§ 501(c)(3) of the Internal Revenue Code. The Center, on behalf of various community agencies and nonprofit organizations, recruits, refers, and places citizens interested in performing volunteer work. The Center provides consultation and training for the staffs and board members of nonprofit agencies and for volunteer program administrators. The Center also serves as an information clearinghouse in the community by providing details about local programs and volunteer opportunities.
RULING
There is no general exemption from the retail sales and use tax for nonprofit organizations as the enclosed copy of Title 23 of the Virginia Administrative Code (VAC) 10-210-1070 explains. The only exemptions from the tax are set out in Code of Virginia §§ 58.1-609.1 through 58.1-609.13 (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, the Center does not qualify for any of the statutory exemptions. While I am mindful of the worthwhile purpose that the Taxpayer serves, absent a statutory exemption that would allow the Center to make purchases exempt of the tax, the department has no authority to grant such an exemption. The Center should continue to pay sales tax to its vendors on all purchases of tangible personal property. If a vendor is not registered to collect the tax, the Center 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 exemption legislation during the 1998 General Assembly Session, the questionnaire should be completed and forwarded to the legislator who will sponsor the bill for the Center's exemption. The legislator must sign the questionnaire and submit it to the department by November 1, 1997.
If you have any questions concerning this letter, you may contact *********** at ***********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/12401S
Rulings of the Tax Commissioner