Tax Type
Retail Sales and Use Tax
Description
Community action programs; Refund request
Topic
Payment and Refund
Date Issued
11-20-1989
November 20, 1989
Re: Request for Ruling/ Sales and Use Tax
Dear*************
This will reply to your letter of October 27, 1989, seeking information on whether various community action programs qualify under Virginia Code §58.1-608.1 for a refund of sales and use tax paid on certain purchases of building materials.
Enclosed is a copy of Commissioner's Ruling dated October 31, 1989, (Public Document 89-297), concerning the general question raised in your letter. As you will note in the ruling, if an organization does not meet all of the criteria set forth in the above statute, it will not qualify for the applicable refund.
For example, an organization qualifying for such refunds must be organized and operated primarily to acquire land and purchase materials to erect or rehabilitate low-cost homes on such land. The organization will not qualify for the refund when the above activities are not the major focus of the organization's program, but rather are performed as an incidental part of the organization's other services in the areas of education, health, transportation and jobs.
While I am mindful of the worthwhile activities being carried out by community action programs, the department's policy in this area is dictated by the rule of strict construction established by the Virginia courts. In interpreting statutory sales and use tax exemptions, the Virginia Supreme Court has consistently held that "exemption from taxation is the exception, and where there is any doubt, the doubt is resolved against the one claiming exemption." Golden Skillet Corp. v. Commonwealth, 214 Va. 276, 199 S.E.2d 511 (1973).
I hope this has answered your question; however, please contact the department if you have additional questions or if we may be of any further assistance.
Sincerely,
W. H. Forst
Tax Commissioner
Related Documents
Rulings of the Tax Commissioner