Tax Type
Retail Sales and Use Tax
Description
School fund raising projects
Topic
Taxability of Persons and Transactions
Date Issued
07-29-1988
July 29, 1988
Re: Request for Ruling/Retail Sales and Use Tax
Dear******************
This will reply to your letter dated June 7, 1988, in which you requested a ruling on the application of retail sales and use tax.
FACTS
**************** ("The Taxpayer") is engaged in the solicitation of wholesale sales of tangible personal property (candy, cookies, cookbooks, candles, etc.) to schools, clubs, and other organizations in connection with fund-raising projects. All orders are received in and are subject to acceptance at the Taxpayer's sole location in Tennessee; the merchandise is shipped from this location. The Taxpayer is registered to collect and remit Virginia sales tax.
The Taxpayer requested a ruling on the application of the Virginia Retail Sales and Use Tax to purchases by nonprofit organizations, Parent Teachers Associations, schools, and Girl Scouts.
RULING
"All tangible personal property purchased for use or consumption by religious, charitable, civic and other nonprofit organizations is taxable" unless a specific statutory exemption is set forth in the Va. Code §58.1-608, and purchased with an exemption certificate (Form ST-13), or such tangible personal property is purchased under a purchase for resale exemption certificate, Form ST-10. Virginia Retail Sales and Use Tax Regulations §630-10-74.
If a nonprofit organization purchases tangible personal property and does "not regularly engage in selling tangible personal property", then the Taxpayer must collect the sales tax at the time of purchase and remit the tax to the Commonwealth. The only time that the Taxpayer does not have to collect the tax from such nonprofit organization is when a resale exemption certificate (Form ST-10) is provided by such organization. If such an exemption applies and the purchases are not for resale, an exemption certificate (Form ST-13) must be provided by the exempt organization to the Taxpayer; if these requirements are met, the Taxpayer does not have to collect and remit the tax. This general rule is also applicable to the Girl Scouts.
In addition, certain nonprofit organizations may be entitled to purchase items tax exempt if the items are for their own use or consumption.
Va. Code §58.1-608(63), provides an exemption from the tax for:
-
- Tangible personal property purchased for use, consumption, or sale at retail by an elementary or secondary school conducted not for profit, or Parent Teacher Association or other group...for use in fund-raising activities, the net proceeds (gross receipts less direct expenses) of which are contributed directly to the school or used to purchase certified school equipment....
- Tangible personal property purchased for use, consumption, or sale at retail by an elementary or secondary school conducted not for profit, or Parent Teacher Association or other group...for use in fund-raising activities, the net proceeds (gross receipts less direct expenses) of which are contributed directly to the school or used to purchase certified school equipment....
I hope that I have answered all your questions and if you have any further questions, please contact the Department.
Sincerely.
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner