Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations, Private Schools, and Churches
Topic
Taxability of Persons and Transactions
Date Issued
11-05-1998
November 5, 1998
Re: Ruling Request: Sales and Use Tax
Dear *****
This is in reply to your letter of September 12, 1998 to ***** of the department's ***** District Office. You request a ruling on the application of the sales and use tax to meals provided by ***** (the ``Church'), during a special worship service.
FACTS
The Church held a Consecration Sunday worship service in the sanctuary as part of a stewardship program. The service involved religious rituals and the pledging of financial commitment cards by the congregation. The service also included meals served to the entire congregation. Following the pledging of financial commitments, the congregants moved from the sanctuary to the fellowship hall of the Church. The service continued in the fellowship hall with hymns and prayers. The meals were served free of charge to every Church member present and a benediction was rendered at the conclusion of the meal.
It is your position that the provision of the meals should be considered part of the religious worship service and that the purchase of the meals by the Church should qualify for exemption.
RULING
Code of Virginia Sec. 58.1-609.8(2) provides churches a broad exemption for purchases of tangible personal property. The exemption does not apply to all purchases. Generally, the exemption extends to tangible personal property for use in (1) religious worship services by a congregation while meeting together in a single location, and (2) libraries, offices, meeting rooms or other rooms in the public church buildings used in carrying out the work of the church and its related ministries.
In addition, the exemption applies to food purchased for distribution outside the church building and food (along with disposable serving items and cleaning supplies) used in the operation of camps or conference centers by a nonprofit church or an organization composed of nonprofit churches which is used in carrying out the work of the church.
In this case, however, the Church is purchasing catered meals which are considered a taxable service under Title 23 of the Virginia Administrative Code (VAC) 10-210-4040. The exemption for churches applies to purchases of tangible personal property, not taxable services. Therefore, the Taxpayer must pay the tax on the purchase of the meals.
In order to make an exempt purchase of meals, an exemption statute must contain specific language which exempts the purchase of services. Presently, there are only four exemptions which specifically exempt taxable services. In addition, there are two exemptions which allow for the exempt purchase of meals. See Code of Virginia Secs.58.1-609.4(4), 58.1-609.4(12), 58.1-609.8(34), 58.1-609.8(50), 58.1 -609.9(23) and 58.1-609.10(16), respectively.
I have enclosed copies of the regulation and cited statutes for your information. If you have additional questions, please contact ***** in the Office of Tax ***** Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/17658J
Re: Ruling Request: Sales and Use Tax
Dear *****
This is in reply to your letter of September 12, 1998 to ***** of the department's ***** District Office. You request a ruling on the application of the sales and use tax to meals provided by ***** (the ``Church'), during a special worship service.
FACTS
The Church held a Consecration Sunday worship service in the sanctuary as part of a stewardship program. The service involved religious rituals and the pledging of financial commitment cards by the congregation. The service also included meals served to the entire congregation. Following the pledging of financial commitments, the congregants moved from the sanctuary to the fellowship hall of the Church. The service continued in the fellowship hall with hymns and prayers. The meals were served free of charge to every Church member present and a benediction was rendered at the conclusion of the meal.
It is your position that the provision of the meals should be considered part of the religious worship service and that the purchase of the meals by the Church should qualify for exemption.
RULING
Code of Virginia Sec. 58.1-609.8(2) provides churches a broad exemption for purchases of tangible personal property. The exemption does not apply to all purchases. Generally, the exemption extends to tangible personal property for use in (1) religious worship services by a congregation while meeting together in a single location, and (2) libraries, offices, meeting rooms or other rooms in the public church buildings used in carrying out the work of the church and its related ministries.
In addition, the exemption applies to food purchased for distribution outside the church building and food (along with disposable serving items and cleaning supplies) used in the operation of camps or conference centers by a nonprofit church or an organization composed of nonprofit churches which is used in carrying out the work of the church.
In this case, however, the Church is purchasing catered meals which are considered a taxable service under Title 23 of the Virginia Administrative Code (VAC) 10-210-4040. The exemption for churches applies to purchases of tangible personal property, not taxable services. Therefore, the Taxpayer must pay the tax on the purchase of the meals.
In order to make an exempt purchase of meals, an exemption statute must contain specific language which exempts the purchase of services. Presently, there are only four exemptions which specifically exempt taxable services. In addition, there are two exemptions which allow for the exempt purchase of meals. See Code of Virginia Secs.58.1-609.4(4), 58.1-609.4(12), 58.1-609.8(34), 58.1-609.8(50), 58.1 -609.9(23) and 58.1-609.10(16), respectively.
I have enclosed copies of the regulation and cited statutes for your information. If you have additional questions, please contact ***** in the Office of Tax ***** Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/17658J
Rulings of the Tax Commissioner