Tax Type
Retail Sales and Use Tax
Description
Nonprofit Organizations; AIDS ministry
Topic
Taxability of Persons and Transactions
Date Issued
11-07-1989
November 7, 1989
Re: Ruling Request/Sales and Use Tax
Dear*************
This will reply to your letter dated February 14, 1989 in which you requested a ruling whether your organization qualifies for exemption from sales and use tax.
FACTS
***********(taxpayer), a nonprofit organization exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code, provides care, financial and pastoral support to persons suffering with Acquired Immune Deficiency Syndrome ("AIDS"). The taxpayer also provides education to the community about AIDS.
The taxpayer is an outreach ministry of several churches and the *********Virginia. The taxpayer maintains an office in one church and conducts their ecumenical worship services every third Sunday in other churches for persons suffering with AIDS, their friends and family members, and persons ministering to AIDS victims.
The taxpayer asks whether it is exempt from paying the tax on office supplies and custom printing (brochures and newsletters the taxpayer distributes).
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 sales tax are set out in §58.1-608 of the Code of Virginia.
§58.1-608(8)(b) of the Code of Virginia, copy enclosed, provides a limited exemption from the tax for certain tangible personal property purchased by a nonprofit church.
To qualify for this exemption, however, a church must have a congregation or membership that meets at a single location for regularly scheduled worship services. Further, the exemption is limited solely to tangible personal property used in regularly scheduled religious worship services by the church congregation or membership or used inside the public church buildings utilized in carrying out the work of the church.
Based on the facts presented, the taxpayer does not qualify for the exemption provided for nonprofit churches since it is a ministry and not a nonprofit church. 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 which includes office supplies and custom printing 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