Opinion Number
11251966
Tax Type
Retail Sales and Use Tax
Description
Churches and Religious Societies
Topic
Taxability of Persons and Transactions
Date Issued
11-25-1966

This will reply to your letter of November 1, 1966, in which you present several questions involving application of the Virginia Retail Sales and Use Tax Act §§. 58-441.1 et seq., Code of Virginia (1950) as amended to churches and religious societies. Your inquiries will be stated and considered in the order set forth in your communication.

(Q) "Is a church or a religious body a `person' within the meaning of § 58-441.2(a).'

Answer: Yes. As you are aware, § 58-441.2(a) of the Virginia Code is a comprehensive provision which specifies that the
  • ". . . any individual, firm, copartnership, cooperative, non-profit membership corporation, joint venture, association, corporation, estate, trust, business trust, trustee in bankruptcy, receiver, auctioneer, syndicate, assignee, club, society, or other group or combination acting as a unit, body politic or political subdivision, whether public or private, or quasi-public, and the plural as well as the singular number.' (Italics supplied).
I am of the opinion that the above-quoted definition is sufficiently broad to include churches and religious societies within its terms. This view is consonant with the legislative history of the statute in question, since several attempts were made in the General Assembly during the course of passage of the statute but without success to exempt churches and religious bodies specifically from the scope of the sales tax enactment. Consistent with this view also is § 1-74 of the Rules and Regulations applicable to the Virginia Retail Sales and Use Tax issued by the Department of Taxation on August 1, 1966. In pertinent part, § 1-74 of the Rules and Regulations prescribes:

"No exemption is granted to churches, religious, charitable, civic and other non-profit organizations, except as hereafter in this section stated. They are required to pay the tax on all purchases of tangible personal property.

"The Act exempts: (a) Sales of tangible personal property for use or consumption by a college or other institution of learning at any level, provided it is not conducted for profit; and,"(b) Sales of tangible personal property for use or consumption by a hospital, provided it is not conducted for profit.

"When any non-profit organization engages in selling tangible personal property at retail, it is required to comply with the provisions of the Act relating to collection and remittance of the tax.'

(Q) "Do not the provisions of Section 183 of the Constitution of Virginia prohibit any tax, including sales tax, from being imposed upon any of the furniture and furnishings of churches or religious bodies?'

Answer: No. § 183 of the Virginia Constitution specifies what property shall be exempt from taxation. The sales tax imposed by the Virginia Retail Sales and Use Tax Act is not a tax on property but is specifically denominated by § 58-441.4 of the Virginia Code as a license or privilege tax upon persons engaged in the business of selling at retail or distributing tangible personal property in this State. As such, I am of the opinion that the sales tax in question does not come within the ambit of § 183 of the Virginia Constitution.

(Q) "The third and somewhat related question is `Does the imposition of a sales tax on churches and religious bodies violate the guarantees of our state and federal laws that provide for a separation of church and state?' '

Answer: No. The sales tax imposed by the statute in question is ordinary and general in its nature and operation and is imposed for the support of government. Such tax is not imposed with the design or does it have the effect of advancing or inhibiting religion or religious bodies. While a different question would be presented if the tax under consideration was special or single in kind and directed solely or predominantly against churches or religious societies, I am of the opinion that the imposition of a general retail sales tax does not violate any guarantee of the "separation of church and state' principle embodied in any of our State or Federal laws.



Attorney General's Opinion

Last Updated 08/25/2014 16:42