Tax Type
Retail Sales and Use Tax
Description
Seminar workshops for electrical industry association
Topic
Taxability of Persons and Transactions
Date Issued
10-18-1988
October 18, 1988
Re: Request for Ruling/Retail Sales and Use Tax Institutions of Learning
This is in reference to your letter of September 1, 1988, in which you requested a ruling as to whether the ******************** ("The Foundation") qualifies for exemption from the retail sales and use tax.
FACTS
The Foundation, a nonprofit organization with Internal Revenue Code §501(c)(3) exemption status, conducts seminars and workshops within and without the Commonwealth. These seminars and workshops are taught by electrical distributing industry veterans and are designed to instruct electrical industry personnel in management approaches and selling techniques and strategies. Seminar and workshop courses cover topics such as Accounts Receivable Management, Basic Lighting, Basic Sales Training, Management To Increase Productivity, etc. The seminars also provide information to participants on the rapidly changing product technology within the industry.
In addition to the seminars and workshops, the Foundation offers the ****** Course (******) which is a products training course for product manufacturers and distributors. The******* is made up of fifteen independent study learning modules; there are three levels of achievement within the program - Bronze, Silver and Gold. This self-taught course takes approximately one and one-half years of home study to complete. No examinations are required and it is up to the student to determine the pace at which he will complete each level of the course.
The Foundation will also administer the in 1989. This is a nationwide exam which will recognize professionals in electrical distribution who possess an extensive knowledge of electrical products and proper product applications.
Specifically, the Foundation requests an exemption from the tax on food. beverages, and lodging incurred in connection with its provision of these seminars.
RULING
Generally, nonprofit organizations do not enjoy an exemption from the sales and use tax (See Virginia Retail Sales and Use Tax Regulations §630-10-74, copy enclosed); however, Virginia Code §58.1-608(23), exempts tangible personal property used or consumed "by a college or other institution of learning...provided such college or institution of learning...is not conducted for profit." Virginia Retail Sales and Use Tax Regulation §630-10-96(A)(1). provides that for an organization to qualify as an "institution of learning" for purposes of sales and use tax exemption, the organization must:
a) Employ a professionally trained faculty.
b) Enroll and graduate students on the basis of academic achievement.
c ) Prescribe courses of study.
d) Provide instruction at regular intervals over a reasonable period of time.
Applying the facts of this case to the regulations and code sections cited above, I find that the Foundation does not meet all of the criteria necessary to qualify as a nonprofit institution of learning for purposes of the exemption from the sales and use tax. While the Foundation has prescribed courses of study and employs a professionally trained faculty. it does not enroll and graduate students on the basis of academic achievement and does not provide instruction at regular intervals over a reasonable period of time. Therefore, the Foundation is required to pay the tax on all of its purchases of tangible personal property from vendors at the time of purchase. In addition. the Foundation should remit use tax directly to the department on any purchases made from vendors who fail to properly charge sales tax.
In your request you also ask specifically whether meals and lodging purchased in connection with the seminars and workshops are subject to the tax. Even if the Foundation met the criteria under the code and regulation sections set forth above, purchases of meals and lodging would continue to be subject to the tax. This is because the real consumer of the meals and lodging is the individual himself and not the nonprofit organization. See Commissioner's Ruling dated May 27. 1988, (Public Document 88-121). a copy of which is enclosed.
If you have any further questions, please contact us.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner