Tax Type
Retail Sales and Use Tax
Description
Church funded nonprofit organization assisting the underprivileged
Topic
Taxability of Persons and Transactions
Date Issued
03-23-1989
March 23, 1989
Re: Request for Ruling: Sales and Use Tax
Dear **************
This will reply to your letter dated November 28, 1988, in which you requested a ruling whether your organization qualifies for exemption from sales and use tax.
FACTS
* * * * "The Taxpayer"), a nonprofit organization exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code, provides community services and programs to the underprivileged living in the Tidewater area. The Taxpayer is funded in part by the************* Church but is not directly operated as a ministry of the church or any of its individual congregations.
RULING
There is no general exemption from the Virginia Retail Sales and Use Tax for nonprofit organizations (see enclosed copy of Virginia Retail Sales and Use Tax Regulation § 630-10-74). The only exemptions from the tax are set out in § 58.1-608 of the Code of Virginia. §58.1-608(38) of the Code of Virginia, copy enclosed, does however provide a limited exemption from the tax for certain tangible personal property purchased by a nonprofit church. Enclosed is a copy of Commissioner's Ruling dated July 27, 1988, which explains that this exemption generally applies only to items of tangible personal property purchased by an individual congregation for use within the public church buildings.
Based upon the facts set forth in the Taxpayer's Mission Statement and those provided to a member of my staff, none of the exemptions provided under current law would apply to the Taxpayer. In addition the Taxpayer does not qualify for the exemption provided for nonprofit churches. While I am mindful of the worthwhile purpose that the Taxpayer serves, absent a statutory exemption that would allow the Taxpayer to make purchases exempt from the tax, the department has no authority to grant such an exemption.
Therefore, the Taxpayer 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 Taxpayer must report and pay the use tax on a Consumer Use Tax Return, ST-7.
If you have any questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner