Tax Type
Retail Sales and Use Tax
Description
List of Exemptions, Exceptions and Exclusions
Topic
Exemptions
Date Issued
11-24-1998
November 24, 1998
Dear *****
This is in reply to a letter of October 23, 1998, from ***** in which he requested information regarding an exemption from the Virginia retail sales and use tax for ***** (the ``Taxpayer').
The information provided indicates that the Taxpayer is exempt from federal income taxation under Sec. 501 (c)(3) of the Internal Revenue Code. The Taxpayer is organized for the purpose of training talent in the ***** area in the musical arts. A choral group is formed from the persons trained, and public performances are presented for a charge. You ask if the Taxpayer qualifies for an exemption from the sales and use tax.
There is no general exemption from the retail sales and use tax for nonprofit organizations. See 23 VAC 10-210-1071, copy enclosed. The only exemptions from the tax are set out in Code of Virginia Secs.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 that would apply to the Taxpayer.
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. Therefore, 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's Use Tax Return, Form ST-7.
I regret that I cannot provide you a more favorable response. If you have any questions regarding this matter, you may contact ***** Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/18042F
Dear *****
This is in reply to a letter of October 23, 1998, from ***** in which he requested information regarding an exemption from the Virginia retail sales and use tax for ***** (the ``Taxpayer').
The information provided indicates that the Taxpayer is exempt from federal income taxation under Sec. 501 (c)(3) of the Internal Revenue Code. The Taxpayer is organized for the purpose of training talent in the ***** area in the musical arts. A choral group is formed from the persons trained, and public performances are presented for a charge. You ask if the Taxpayer qualifies for an exemption from the sales and use tax.
There is no general exemption from the retail sales and use tax for nonprofit organizations. See 23 VAC 10-210-1071, copy enclosed. The only exemptions from the tax are set out in Code of Virginia Secs.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 that would apply to the Taxpayer.
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. Therefore, 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's Use Tax Return, Form ST-7.
I regret that I cannot provide you a more favorable response. If you have any questions regarding this matter, you may contact ***** Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/18042F
Rulings of the Tax Commissioner