Tax Type
Corporation Income Tax
Retail Sales and Use Tax
Description
Nonprofit association of women physical educators
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
08-22-1990
August 22, 1990
Re: Request for Ruling: Income Tax, Sales and Use Tax
Dear ****
This will reply to your letter of July 17, 1990 in which you request a ruling whether the ***** (the "Taxpayer") qualifies for exemption from Virginia income tax and the retail sales and use tax.
FACTS
The Taxpayer is a regional nonprofit association of women physical educators who share common interests and concerns specific to physical education in higher education. The Taxpayer is seeking a tax exemption from each of its 13 member states.
RULING
Income Tax
Virginia Code §58.1-401 and Virginia Corporation Income Tax Regulation 630-3-401(F) exempt from the state income tax nonprofit corporations which are exempt from federal income tax under I.R.C. §501(c).
Thus, if the Taxpayer qualifies for exemption from federal income tax under I.R.C. §501(c), the Taxpayer would also qualify for exemption from Virginia income tax. However, if the Taxpayer has unrelated business taxable income as defined in I.R.C. §512, it must file a Virginia return and pay Virginia income tax on such income.
Sales and Use Tax
There is no general exemption from the Virginia retail sales and use tax for nonprofit organizations (see Virginia Regulation 630-10-71). The only exemptions from the tax are set out in Virginia Code §58.1-608. 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 of the sales tax, the department has no authority to grant such an exemption.
Therefore, the Taxpayer is required to pay the sales tax to its retailers on all purchases of tangible personal property. If a retailer is not registered to collect the tax, the Taxpayer must report and pay use tax on a Consumer Use Tax Return, Form ST-7.
If you have any further questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner