Tax Type
Retail Sales and Use Tax
Description
Funeral directors; Billing to nonprofit nursing homes
Topic
Taxability of Persons and Transactions
Date Issued
06-27-1989
June 27, 1989
Re: Ruling Request/ Sales and Use Tax
Dear *****************
This will reply to your letter of April 7, 1989 seeking information on the application of the sales and use tax to sales by **************** the taxpayer.
FACTS
The taxpayer is a funeral home which performs funerals for decedents of nonprofit hospitals and nursing homes. In some cases, the taxpayer will bill a nonprofit hospital or nursing home directly for the tangible items provided in connection with such funerals, rather than the personal estates or surviving relatives of the decedents. You ask whether the tax applies to such charges or whether the taxpayer may provide such items exempt of the tax, under certificates of exemption received from such nonprofit hospitals or nursing homes.
RULING
Virginia Retail Sales and Use Tax Regulation (VR) 630-10-41, copy enclosed, sets forth the application of the sales and use tax to charges for tangible personal property such as caskets, vaults, clothing, etc., provided by funeral directors.
Virginia Code §58.1-608(23) provides an exemption from the sales and use tax for, "[t]angible personal property for use or consumption by ... a hospital, licensed nursing home or a licensed nonprofit nonstock home for adults as defined by subsection A of §63.1-172; ... provided such ... hospital, licensed nursing home or home for adults is not conducted for profit." (Emphasis added).
While the exemption for nonprofit hospitals and nursing homes is a broad one, it is not complete. In order to qualify for this exemption, the tangible items purchased must be for use or consumption by nonprofit hospitals or nursing homes themselves in providing health care, nursing care, and related services.
Items purchased by a nonprofit hospital or nursing home from the taxpayer for use in conducting funeral services for their decedents, are not items purchased for use or consumption by the nonprofit hospitals or nursing homes themselves. Accordingly, I find no basis for extending the above quoted exemption to such items.
I hope this has answered your question, but let me know if you have any further questions.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner