Tax Type
Retail Sales and Use Tax
Description
Requirements for exemption; Education programs at church conference center
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
12-14-1984
December 14, 1984
Re: Ruling Request: Sales and Use Tax
Dear ************************
This will reply to your letter of March 30, 1984 and subsequent correspondence transmitting information concerning applicability of sales and use tax to ********** programs conducted at church conference centers.
FACTS
As its **** Annual Report states, ************** (the "Taxpayer") is a *********** nonprofit corporation which, by its network of over 500 educational institutions in the United States, Canada and some countries overseas, "offer[s] special low-cost, short-term residential academic programs for older adults. Courses are in the liberal arts and sciences tradition and presuppose no particular level of formal education on the part of the participant." The courses, which are college-level, are taught by college faculty and are planned by the college with input by Taxpayer. Programs generally last one week, although some extend to two or three weeks, and are limited to 30 to 40 participants. Three courses are usually given and participants can take all or some. There are no exams or required homework but professors are available to suggest outside reading and study. A variety of extracurricular activities are also offered. At the end of each program certificates of completion are awarded on the basis of attendance.
In Virginia three of the programs are conducted at church conference centers. Taxpayer seeks an exemption from Virginia retail sales and use tax for these programs.
DETERMINATION
All sales of tangible personal property in Virginia are subject to sales tax. Taxation is the rule and exemptions are strictly construed (Virginia Retail Sales and Use Tax Regs. § 1-35.2). §58-441.6(t) of the Code of Virginia exempts from the tax tangible personal property for use or consumption by a nonprofit college or other institution of learning. According to Virginia Retail Sales and Use Tax Regs. § 1-96, an "other institution of learning" must (a) employ a professionally-trained faculty; (b) enroll and graduate students on the basis of academic achievement; (c) prescribe courses of study; and (d) provide instruction at regular intervals over a reasonable period of time.
Although Taxpayer does employ professionally-trained faculty to teach the courses, Taxpayer does not satisfy the remaining three requirements. The course participants are neither enrolled nor graduated on the basis of academic achievement. Courses are open to all persons over 60 years of age without any prerequisites and the certificate of completion is awarded on the basis of attendance. Moreover, the programs do not constitute prescribed courses of study because the courses, although they are college-level in content and in the liberal arts and sciences in scope, are self-contained and deal with one subject area. Finally, the courses offered are generally seven days, which is not long enough to constitute "a reasonable period of time."
Based on the foregoing, despite Taxpayer's commendable program, there is no statutory basis to grant an exemption from the sales and use tax to Taxpayer.
Sincerely,
W. H. Forst
State Tax Commissioner
Rulings of the Tax Commissioner