Tax Type
Retail Sales and Use Tax
Description
List of Exemptions, Exceptions and Exclusions
Topic
Exemptions
Date Issued
12-18-1998
December 18, 1998
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****
This is in reply to your September 9, 1998 meeting with members of the department's Tax Policy staff in which you presented additional information and requested reconsideration of the department's ruling of September 16, 1997, regarding the availability of a retail sales and use tax exemption for ***** (the ``Center').
FACTS
The Center is a joint venture corporation exempt from federal income taxation under Sec. 501 (c)(3) of the Internal Revenue Code. The Articles of Incorporation state that the Center's purpose is to acquire, own and operate an out-patient medical facility for the provision of radiation therapy services to cancer patients. You maintain that the Center operates exclusively to eliminate cancer by preventing cancer, saving lives from cancer and diminishing suffering from cancer through research, education, and service. Accordingly, you believe the Center qualifies for exemption under Code of Virginia Sec. 58.1-609.8(23) and request reconsideration of the department's previous ruling (Public Document 97-371, 9/16/97) denying the exemption.
RULING
After careful consideration of the information provided during the September 9, 1998 meeting with members of the Tax Policy staff, I find no basis to change my previous ruling. The Center does not qualify for the exemption cited above, as it is not organized exclusively for the purposes stated in the statute. As noted in my letter of September 16, 1997, the Center is organized ``to acquire, own and operate an outpatient medical facility for the provision of radiation therapy services to cancer patients.' This differs from the purposes stated in the statute. While the Center may operate to eliminate cancer, it is not organized exclusively for the purposes set forth in the exemption statute.
As you are aware, the 1998 General Assembly enacted an exemption for which the Center qualifies, Code of Virginia Sec. 58.1-609.7(28). The exemption applies to tangible personal property purchased for use or consumption by a qualifying organization and became effective July 1, 1998. Purchases made prior to the effective date of the exemption are taxable, absent any other statutory exemption.
I would also note that a question was raised during the meeting with Tax Policy staff concerning potential exemptions for the purchase of a linear accelerator used in radiation therapy for treating cancer patients. Based on the information provided, there is no exemption which would apply to the purchase of this equipment, unless the purchase was made from a seller who qualified for the occasional sale exemption found in Code of Virginia Sec. 58.1-609.10(2), copy enclosed.
I regret that I cannot provide you a more favorable response. If you have any questions regarding this matter, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/18492F
Re: Request for Ruling: Retail Sales and Use Tax
Dear *****
This is in reply to your September 9, 1998 meeting with members of the department's Tax Policy staff in which you presented additional information and requested reconsideration of the department's ruling of September 16, 1997, regarding the availability of a retail sales and use tax exemption for ***** (the ``Center').
FACTS
The Center is a joint venture corporation exempt from federal income taxation under Sec. 501 (c)(3) of the Internal Revenue Code. The Articles of Incorporation state that the Center's purpose is to acquire, own and operate an out-patient medical facility for the provision of radiation therapy services to cancer patients. You maintain that the Center operates exclusively to eliminate cancer by preventing cancer, saving lives from cancer and diminishing suffering from cancer through research, education, and service. Accordingly, you believe the Center qualifies for exemption under Code of Virginia Sec. 58.1-609.8(23) and request reconsideration of the department's previous ruling (Public Document 97-371, 9/16/97) denying the exemption.
RULING
-
- Code of Virginia Sec. 58.1-609.8(23) exempts from the retail sales and use tax:
-
- tangible personal property for use or consumption, or further distribution, or sold by an organization exempt from taxation under Sec. 501 (c)(3) of the Internal Revenue Code which is organized exclusively for the purpose of eliminating cancer as a major health problem by preventing cancer, saving lives from cancer, and diminishing suffering from cancer through research, education and service.
- tangible personal property for use or consumption, or further distribution, or sold by an organization exempt from taxation under Sec. 501 (c)(3) of the Internal Revenue Code which is organized exclusively for the purpose of eliminating cancer as a major health problem by preventing cancer, saving lives from cancer, and diminishing suffering from cancer through research, education and service.
After careful consideration of the information provided during the September 9, 1998 meeting with members of the Tax Policy staff, I find no basis to change my previous ruling. The Center does not qualify for the exemption cited above, as it is not organized exclusively for the purposes stated in the statute. As noted in my letter of September 16, 1997, the Center is organized ``to acquire, own and operate an outpatient medical facility for the provision of radiation therapy services to cancer patients.' This differs from the purposes stated in the statute. While the Center may operate to eliminate cancer, it is not organized exclusively for the purposes set forth in the exemption statute.
As you are aware, the 1998 General Assembly enacted an exemption for which the Center qualifies, Code of Virginia Sec. 58.1-609.7(28). The exemption applies to tangible personal property purchased for use or consumption by a qualifying organization and became effective July 1, 1998. Purchases made prior to the effective date of the exemption are taxable, absent any other statutory exemption.
I would also note that a question was raised during the meeting with Tax Policy staff concerning potential exemptions for the purchase of a linear accelerator used in radiation therapy for treating cancer patients. Based on the information provided, there is no exemption which would apply to the purchase of this equipment, unless the purchase was made from a seller who qualified for the occasional sale exemption found in Code of Virginia Sec. 58.1-609.10(2), copy enclosed.
I regret that I cannot provide you a more favorable response. If you have any questions regarding this matter, you may contact ***** at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/18492F
Rulings of the Tax Commissioner