Bulletin Number
VTB 85-10
Tax Type
Retail Sales and Use Tax
Description
Schools and Parent Teacher Associations
Topic
Taxability of Persons and Transactions
Date Issued
08-06-1985
The Department of Taxation has been advised there is some confusion concerning the applicability of the Virginia Retail Sales and Use Tax to schools, parent teacher associations and to other groups sponsoring fund raising events for schools. Virginia Retail Sales and Use Tax Regulation 630-10-96 sets forth the following policy in regard to the sales tax applicability to these groups.
The following purchases may be made tax free under a certificate of exemption:
1. Purchases of tangible personal property by nonprofit schools, colleges and other institutions of learning for their use or consumption and paid for out of their funds.
2. Purchases of tangible personal property by public free schools for their use or consumption, provided purchases are made pursuant to official purchase orders to be paid for out of public funds.
3. Purchases of tangible personal property out of school activity funds, such as athletic equipment, band instruments, etc. that become the property of the school.
Parent teacher associations and other groups, that occasionally engage in fund raising activities, are deemed to be the consumers of the tangible personal property purchased; therefore, are subject to the tax and may not purchase items under a certificate of exemption.
The tax does not apply to school textbooks sold by a local school board or an authorized agency. It also does not apply to school textbooks for use by students attending a college or other nonprofit institution when they are sold by the institution or by a dealer (provided such textbooks are certified by the institution as required course materials).
There is a typographical error in Virginia Retail Sales and Use Tax Regulation 630-10-96. The word "not' in the first line of section A.5 "Independent associations'-should be deleted. This section should state:
The tax does apply to sales to independent athletic and other such associations, whether or not affiliated with a nonprofit institution of learning (including state institutions). When these associations make retail sales, they should contact the Department to determine if they should register as a dealer.
Tax Bulletins