Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization operating recreation center in low-income neighborhood
Topic
Taxability of Persons and Transactions
Date Issued
10-26-1988
October 26, 1988
Re: Request for Ruling/Retail Sales and Use Tax
Nonprofit Organizations
Dear****************
This will reply to your letter of September 16, 1988, in which you requested a ruling whether your nonprofit organization qualifies for exemption from sales and use tax.
FACTS
************* an organization exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code, operates a recreational facility for children between the ages of six to sixteen that live in a low income neighborhood. ********* provides a structured environment for the children enabling them to participate in nutritional (after school snacks and hot lunches during the summer), recreational (roller skating, bowling, swimming, etc.), educational (individual tutoring, films, lectures, etc. ) and social (parties, discussions, field trips) programs under the direction of a full time director. *********** is open year round and has activities on a regularly scheduled basis. All activities require registration and parental consent. There is no charge for the programs/activities; however, participation is based upon a positive behavior system (points are given for appropriate behavior, participation, and attendance).
RULING
There is no general exemption from Virginia Retail Sales and Use Tax for nonprofit organizations (See Virginia Retail Sales and Use Tax Regulations §630-10-74, copy enclosed). The only exemptions from the tax are set out in Virginia Code §58.1-608. While I am mindful of the worthwhile purpose that the****serves, absent a statutory exemption that would allow the *** to make purchases exempt from the tax, the Department has no authority to grant such an exemption.
Therefore, the *************is required to pay the tax on all purchases of tangible personal property to the retailer at the time of purchase. If the retailer is not registered to collect the tax, the ********** must report and pay the use tax on a Consumer Tax Return ST-7.
If I can be of further assistance, please contact the Department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner