Tax Type
Retail Sales and Use Tax
Description
Purchases made by Governor's Commission
Topic
Exemptions
Date Issued
07-11-1986
July 11, 1986
Re: Request for Ruling/Sales and Use Tax
Dear********************
This will reply to your letter of June 20, 1986, in which you request a ruling on the applicability of the sales and use tax to purchases and leases by the ********************.
FACTS
The *********** (Commission) was established pursuant to the Governor's Executive Order Number in order to commemorate ********** the birthday of***********. The commission is composed of eighteen members appointed by the Governor and serving at his pleasure. In view of the commission's relationship to the state government, you request a ruling on the applicability of the sales and use tax to the commission's purchases and leases of tangible personal property.
RULING
§ 58.1-608.18 of the Code of Virginia provides an exemption from the sales and use tax for "[t]angible personal property for use or consumption by the Commonwealth, (or) any political subdivision of the Commonwealth." In determining whether the commission in this case qualifies for exemption either as an agency or political subdivision of the Commonwealth, I feel it is useful to analyze the definition of "commission" found in Virginia Code § a 2.1-l.2:
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- "Commission" means a temporary collegial body established within the executive branch for a specified purpose and specified period of time. Emphasis added
Any commission meeting the above definition is considered to be a part of the executive branch and therefore a part of state government, thus sales or leases to such a commission would be considered sales or leases to the Commonwealth. In this case, as stated in Executive Order******* the commission is a temporary collegial body established for a specified purpose and a specified period of time and is required to advise the Governor of its activities. Accordingly, it falls within the definition of "commission" set forth in Virginia Code § 2.1-1.2 and qualifies for an exemption from the sales and use tax.
For your information, I have enclosed a copy of § 630-10-45 of the Virginia Retail Sales and Use Tax Regulations, which explains the application of the tax to governmental organizations. It should be noted that under this regulation, the governmental exemption is deemed to apply only when "purchases (or leases) are pursuant to required official purchase orders and paid for out of public funds." Therefore, if the commission purchases or leases an item and does not pay for the transaction out of public funds, the exemption will not be available.
If you have any further questions, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner