Tax Type
Retail Sales and Use Tax
Description
Nonprofit Organization
Topic
Exemptions
Date Issued
07-23-1999
July 23, 1999
Re: Request for Ruling: Retail Sales and Use Tax
Dear***
This is in reply to your letter of July 6, 1999, in which you request information regarding an exemption from the Virginia retail sales and use tax for ***** ***** (the ``Taxpayer').
The information provided indicates that the Taxpayer is a nonprofit organization which operates an after-school program providing music education to high school age students. The Taxpayer's funding comes from private individuals, foundations, and corporations. It receives no government money. A $10.00 membership fee is charged as an encouragement to the students to respect the musical equipment and the volunteers who teach the class.
RULING
In Virginia, there is no general exemption from the retail sales and use tax for nonprofit organizations. The only nonprofit organizations exempt from the tax on their purchases are those specifically set forth 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 purchases of tangible personal property which it uses, consumes or stores in Virginia. If a vendor is not registered to collect the sales tax, or fails to collect the sales tax on a taxable sale, the Taxpayer is required to report and remit the use tax on a Consumer's Use Tax Return, Form ST-7.
If you should have any questions regarding this ruling, please contact of the Department's Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/23946Q
Re: Request for Ruling: Retail Sales and Use Tax
Dear***
This is in reply to your letter of July 6, 1999, in which you request information regarding an exemption from the Virginia retail sales and use tax for ***** ***** (the ``Taxpayer').
The information provided indicates that the Taxpayer is a nonprofit organization which operates an after-school program providing music education to high school age students. The Taxpayer's funding comes from private individuals, foundations, and corporations. It receives no government money. A $10.00 membership fee is charged as an encouragement to the students to respect the musical equipment and the volunteers who teach the class.
RULING
In Virginia, there is no general exemption from the retail sales and use tax for nonprofit organizations. The only nonprofit organizations exempt from the tax on their purchases are those specifically set forth 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 purchases of tangible personal property which it uses, consumes or stores in Virginia. If a vendor is not registered to collect the sales tax, or fails to collect the sales tax on a taxable sale, the Taxpayer is required to report and remit the use tax on a Consumer's Use Tax Return, Form ST-7.
If you should have any questions regarding this ruling, please contact of the Department's Office of Tax Policy at *****.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/23946Q
Rulings of the Tax Commissioner