Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization training retarded citizens; Exemption criteria
Topic
Exemptions
Date Issued
04-29-1986
April 29, 1986
Re: Request for Ruling/ Sales and Use Tax
Dear ***********************
This will reply to your letter of April 4, 1986 requesting an exemption from the sales and use tax for purchases of tangible personal property by *********** (taxpayer).
There is no general exemption in the sales and use tax for purchases made by charitable or nonprofit organizations; therefore I cannot find basis for granting an exemption to taxpayer in this case.
However, in reviewing the specific sales and use tax exemptions which are available, it is possible that taxpayer might qualify for the exemption set forth in §58.1-608.24) which provides that the sales and use tax shall not apply to, "[t]angible personal property purchased by an organization exempt from taxation under §501(c)(3) of the Internal Revenue Code and organized exclusively for the purpose of providing education, training and services to retarded citizens of the Commonwealth, provided such property is used exclusively for the purpose set forth herein and further provided that such organization receives more than fifty percent of its total funding from federal, state, or local governments." (Emphasis added)
Therefore, if taxpayer meets all of the criteria set forth in the above referenced subsection or any other subsection of Section §58.1-608 of the Code, (copy enclosed), it may qualify for an exemption from the sales and use tax. However, it should be noted that all exemptions from the sales tax are strictly construed against a finding of exemption, so that when a statute is susceptible to alternative constructions, one granting an exemption and the other denying it, the latter construction will be adopted. Winchester TV Cable Co. v. State Tax Commissioner, 216 Va. 286, 217 S.E. 2d 885 (1975).
I hope this information has been of assistance to you, but please let me know If we can be of further assistance.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner