Tax Type
Retail Sales and Use Tax
Description
Government organization
Topic
Exemptions
Date Issued
10-19-1987
October 19, 1987
Re: Ruling Request/ Sales and Use Tax
Dear *********************
This will reply to your letter of July 18. 1987 seeking reconsideration of a ruling issued by the department in the above referenced case on March 31, 1987. In a recent conversation with a member of my staff, it was indicated that you seek a reconsideration of that portion of my March 31, 1987 ruling which denied an exemption from the retail sales and use tax to the ******************.
FACTS
In your most recent letter. you reassert that the ********** is a branch of the ********** and as such qualifies for exemption from the tax as an instrumentality of the U.S. government.
In support of this contention. you note that the *********** is administered by the under the direction of the *****************. In addition. you note that 14 U.S.C. §830 provides for the payment by the ******* of the actual and necessary traveling expenses and subsistence to members of the assigned to authorized specific duties and for actual and necessary expenses of operation of any motorboat. yacht. aircraft, or radio station when assigned to ******** duty.
In addition, you have submitted a letter ruling from the Internal Revenue Service, dated January 14, 1981, which indicates that the ***** has been deemed to be an integral part of the federal government for federal income tax purposes.
Accordingly, you request reconsideration of the department's Previous denial of a sales tax exemption to the ***************.
RULING
§58.1-608(18) of the Virginia Code provides an exemption from the sales and use tax for "tangible personal property for use or consumption by the Commonwealth, any political subdivision of the Commonwealth, or the United States."
Based upon the information recently provided, I find basis for concluding that the*********** is an instrumentality of the U.S. government entitled to exemption from the sales and use tax.
However, the exemption granted above is not unlimited. Rather, under Virginia Regulation 630-10-45, a copy of which was enclosed with my previous letter, only those purchases made by the **** "pursuant to official purchase orders-to be Paid out of public funds," will qualify for this exemption. In the example given in the regulation, if an employee of the government pays for meals and lodging with personal funds and will be reimbursed by the government or uses a travel advance, no exemption is available even though the employee may be traveling pursuant to official government orders.
Accordingly, to the extent that my March 31, 1987 letter denied a sales tax exemption to the *********** it is hereby rescinded. However, I continue to find no basis for granting an exemption to the ************* or any other private nonprofit organization which may be affiliated with the *************.
I trust that this responds to your question, but let the department know if you have any further questions.
Sincerely
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner