Tax Type
Retail Sales and Use Tax
Description
Nonprofit Organization
Topic
Exemptions
Date Issued
10-14-1999
October 14, 1999
Re: Request for Ruling: Retail Sales and Use Tax
Dear*****
This is in reply to your letter of September 22, 1999, in which you request a ruling regarding the application of the retail sales and use tax to purchases of tangible personal property by ***** (the ``Taxpayer').
FACTS
The Taxpayer, a nonprofit organization exempt from income taxation under 501(c)(3) of the Internal Revenue Code, provides educational and community resource information and support to highly at-risk, low-income families with infants and toddlers. The Taxpayer conducts home assessment visits to determine the minor children's developmental status as well as the family's strengths and needs to support the development of the children. The Taxpayer is seeking an exemption from the sales and use tax for its purchases of tangible personal property.
RULING
In Virginia, there is no general exemption from the retail sales and use tax for nonprofit organizations. 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. Consequently, the Taxpayer is required to pay the tax to vendors on its purchases of tangible personal property which it uses, consumes or stores in Virginia, including items given away. 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 accrue and remit the use tax on a Consumer's Use Tax Return, Form ST-7.
If you should have any additional questions about this ruling, please contact ***** of my tax policy staff at *****
Sincerely,
Danny M. Payne
Tax Commissioner
Re: Request for Ruling: Retail Sales and Use Tax
Dear*****
This is in reply to your letter of September 22, 1999, in which you request a ruling regarding the application of the retail sales and use tax to purchases of tangible personal property by ***** (the ``Taxpayer').
FACTS
The Taxpayer, a nonprofit organization exempt from income taxation under 501(c)(3) of the Internal Revenue Code, provides educational and community resource information and support to highly at-risk, low-income families with infants and toddlers. The Taxpayer conducts home assessment visits to determine the minor children's developmental status as well as the family's strengths and needs to support the development of the children. The Taxpayer is seeking an exemption from the sales and use tax for its purchases of tangible personal property.
RULING
In Virginia, there is no general exemption from the retail sales and use tax for nonprofit organizations. 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. Consequently, the Taxpayer is required to pay the tax to vendors on its purchases of tangible personal property which it uses, consumes or stores in Virginia, including items given away. 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 accrue and remit the use tax on a Consumer's Use Tax Return, Form ST-7.
If you should have any additional questions about this ruling, please contact ***** of my tax policy staff at *****
Sincerely,
Danny M. Payne
Tax Commissioner
Rulings of the Tax Commissioner