Tax Type
Retail Sales and Use Tax
Description
List of Exemptions, Exceptions and Exclusions
Topic
Exemptions
Date Issued
03-12-1999
March 12, 1999
Re: Request for Ruling: Retail Sales and Use Tax
Dear***************
This is in reply to your letter of February 27, 1999, in which you request a ruling regarding the availability of a retail sales and use tax exemption for ********** (the "Taxpayer').
FACTS
The Taxpayer, a nonprofit housing community for older persons, is in the process of constructing a new wing to provide assisted living for the elderly. You ask if the Taxpayer qualifies for the exemption from the retail sales and use tax in Code of Virginia § 58.1-609.10(8) for tangible personal property purchased by the Taxpayer or its contractor for use in the construction of the new wing.
RULING
Code of Virginia § 58.1-609.10(8) provides an exemption from the retail sales and use tax for:
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- tangible personal property purchased for use in the construction of ***** improvements which are to be used solely for affordable rental dwelling units for persons who are of the age of at least 62 years, if at least part of the funds for site development and the construction are provided by an organization exempt from taxation under § 501 (c)(3) of the Internal Revenue Code and if the amount of funds which would otherwise have to be provided by the tax exempt organization is reduced by the amount of the sales and use tax exemption. The rental units shall be considered to be affordable if the rent charged meets the criteria of the Federal Low Income Housing Tax Credit Program.
- tangible personal property purchased for use in the construction of ***** improvements which are to be used solely for affordable rental dwelling units for persons who are of the age of at least 62 years, if at least part of the funds for site development and the construction are provided by an organization exempt from taxation under § 501 (c)(3) of the Internal Revenue Code and if the amount of funds which would otherwise have to be provided by the tax exempt organization is reduced by the amount of the sales and use tax exemption. The rental units shall be considered to be affordable if the rent charged meets the criteria of the Federal Low Income Housing Tax Credit Program.
Tangible personal property purchased for use in the Taxpayer's current construction of the new wing qualifies for exemption, as at least part of the funds for site development and construction are provided by an organization exempt from taxation under § 501 (c)(3) of the Internal Revenue Code. The exemption is available for construction materials purchased by the Taxpayer or by a contractor or subcontractor performing the real property construction improvement project for the Taxpayer. The
Taxpayer (or the contractor or subcontractor) should present a copy of this letter to the supplier in order to purchase construction materials exempt of the tax.
If the Taxpayer (or the contractor or subcontractor) has already paid tax on items qualifying for the exemption, it may request a refund of the tax paid by presenting a copy of this letter to its supplier. The supplier should refund the tax paid on exempt items and claim a credit for the amount of the refund on its sales and use tax return filed for the month.
If you have any questions regarding the application of the exemption or need additional information, you may contact ********* of the department's Office of Tax Policy at ********.
Sincerely,
Danny M. Payne
Tax Commissioner
OTP/21397F
Rulings of the Tax Commissioner