89-312 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Description

Nonprofit organization providing a clearinghouse for services to the needy

Topic

Exemptions

Taxability of Persons and Transactions

Date Issued

11-07-1989

November 7, 1989

Re: Request for Ruling/Sales and Use Tax

Dear****************

This will reply to your letter of October 2, 1989 in which you request a ruling whether your organization qualifies for exemption from the retail sales and use tax.

FACTS

*********(the "Taxpayer") is a nonprofit organization exempt from income taxation under §501(c)(3) of the Internal Revenue Code. It was established to provide an organization through which concerned individuals and groups can work together to alleviate human suffering in its local area and meet the emergency needs of people without regard to race, religion, color, national origin or sex. It acts as a clearinghouse to eliminate duplication of and to expedite services to the needy. The Taxpayer also participates in other activities designed to promote the general health and well being of its community.

Pursuant to its organizational objectives, the Taxpayer operates a food closet, a clothing closet, and a shelter for homeless families; provides energy assistance to meet winter fuel bills and emergency assistance in the form of rental assistance to prevent eviction, bus tickets for the stranded, etc.; offers a furniture match program; and manages low income housing in conjunction with another corporation.

You seek an exemption to allow the Taxpayer to purchase items exempt from the retail sales and use tax.

RULING

There is no general exemption from the Virginia retail sales and
use tax for nonprofit organizations. The only exemptions from the tax are set out in Virginia Code Section 58.1-608 (copy enclosed). While I am mindful of the many worthwhile purposes that the Taxpayer serves, the department can grant it exemption from taxation for only those of its operations which are specifically exempt under §58.1-608. Virginia Code §58.1-608(8)(1) provides an exemption from the retail sales and use tax for:

- [t]angible personal property purchased for use or consumption by a shelter for homeless individuals operated by an organization exempt from taxation pursuant to §501(c)(3) of the Internal Revenue Code...

Thus, based on the information provided, I find that your organization qualifies for the exemption cited above. Please note that this exemption which expires on July 1, 1993 unless extended by the General Assembly applies only to those purchases of tangible personal property made for use or consumption by the Taxpayer in its shelter for the homeless, and does not extend to any other purchases made by the Taxpayer.

For purchases of tangible personal property other than those for the shelter for the homeless, the Taxpayer is required to pay the tax to the retailer if the retailer is registered to collect the tax. If the retailer is not registered to collect the tax, the Taxpayer must report and pay the tax on a Consumer Use Tax Return, Form ST-7 (copy enclosed).

If you have any further questions, please contact the department.

Sincerely,

W. H. Forst
Tax Commissioner

Rulings of the Tax Commissioner