Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization teaching the use of performing arts as a medium for religious messages; Exemption criteria
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
04-22-1986
April 22, 1986
Re: Ruling Request: Sales and Use Tax
Dear *****************
This will reply to your letter of January S, 1986, in which you request an exemption from the Virginia Retail Sales and Use Tax for your organization, *********************.
FACTS
Company was organized in January, 1985 and has been classified as a nonprofit organization under the provisions of IRC §501 (c)(3). It was formed to provide training to all interested parties in the skills of clowning, mime, puppetry, storytelling and dance for use in interfaith ministry. It teaches the use of the performing arts as a medium for religious messages. Company carries out its functions by holding conferences and workshops to teach these skills, for a fee to the public, for use in a church or synagogue.
RULING
Virginia Code §58.1-608(38) exempts from the Virginia Retail Sales and Use Tax tangible personal property purchased by a nonprofit church for use, "... (i) in religious worship services by a congregation or church membership while meeting together in a single location, and (ii) in the libraries, offices, meetings or counseling rooms or other rooms in the public church buildings used in carrying out the work of the church and its related ministries..."
As the above referenced exemption makes clear, there is no general or blanket exemption in the Virginia Retail Sales and Use Tax Act for nonprofit churches or ancillary religious organizations of such churches. Rather, only those items of property purchased by a nonprofit church for use in the narrowly prescribed circumstances stated above qualify for the exemption.
Although Company sponsors and conducts worship services as part of its workshops and training classes that they present at various locations, Company has not demonstrated that the participants in these workshops and classes constitute a congregation or church membership. Nor are such workshops and classes deemed to be conducted at a single location. Accordingly, Company fails to meet the requirement that the tangible personal property be used "... in religious worship services by a congregation or church membership while meeting together in a single location..."
In addition, the department has consistently maintained that the exemption for tangible personal property used in public church buildings must be understood in its ordinary sense, i.e. as buildings whose primary purpose is to house regularly scheduled religious worship services. Since Company has not shown the existence of a congregation or church membership which regularly meets at a single location for worship services, it cannot be said that their corporate or business offices qualify as public church buildings. The business offices serve to provide administrative and clerical support for the work of Company.
Based upon all of the foregoing, I find no statutory basis for granting an exemption from the Virginia Retail Sales and Use tax to Company.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner