Tax Type
Retail Sales and Use Tax
Description
Art sales by prison inmates
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
02-27-1987
February 27, 1987
Re: Request for Ruling/Sales and Use Tax
Dear****************
This will reply to your letter of July 17, 1986, in which you request a ruling on the application of the sales and use tax to sales of artistic products by prisoners at your institution.
Certain sales by prisoners are exempt from the sales and use tax as set forth in Section 58.1-608.47 of the Code of Virginia. This statute exempts "[s]ales by prisoners confined in state correctional facilities of artistic products personally made by the prisoners as authorized by §53.1-46 of the Code." This exemption was enacted by the 1982 session of the General Assembly as part of comprehensive corrections legislation that also provided statutory authority for the sale of artistic products by prisoners (see Chapter 636, 1982 Acts of the Assembly ).
It should be noted here that this exemption does not apply to other types of tangible personal property regularly sold by prisoners. Nor are sales (other than sales of artistic products created by prisoners) by nonprofit prisoner organizations automatically exempted from the tax. All sales, including sales by nonprofit organizations are subject to the sales tax unless specifically exempted by law. As there are no exemptions at the present that would specifically apply to prisoner organizations such as the Jaycees, such organizations may be required to register and collect the tax when they make sales.
Whether collection of the tax will be required depends on the frequency of sales. If the Jaycees or similar organizations make sales on three or fewer occasions per year, such sales would be nontaxable under the "occasional sale" exemption found at Virginia Code §58.1-608.15 and §630-10-75 of the Virginia Retail Sales and Use Tax Regulations. If the organization conducts four or more sales during the year, however, it will be required to register and collect the tax.
Lastly, I will address the application of the tax to items purchased by prisoners or prisoner groups. Again, there are no specific exemptions from the tax for purchases by such persons or groups on goods purchased for their own use. However, items such as paint, artists' supplies, pottery supplies, leather, etc., that will become components of finished products for sale may be purchased by prisoners or prisoner groups under resale exemption certificates that are available from the department.
I hope that this will give you a useful overview of the application of the tax to prisoners and prisoner groups in the Virginia corrections system. If you have any further questions or concerns, please do not hesitate to contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner