Tax Type
Retail Sales and Use Tax
Description
Nonprofit serving disadvantaged and handicapped youth
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
12-05-1990
December 5, 1990
Re: Request for Ruling: Sales and Use Tax
Dear ************
This will reply to your letter of October 11, 1990 in which you request a ruling whether your organization qualifies for exemption from the sales and use tax.
FACTS
*****(the "Taxpayer"), a nonprofit organization exempt from income taxation under §501(c)(3) of the Internal Revenue Code, provides a day-care network for mildly ill children, skills training workshops for disadvantaged and handicapped youths, and educational incentive programs for "at risk" economically disadvantaged youths. In addition, the Taxpayer distributes donated clothing, shoes, toys, and educational products to the needy on a year-round basis. The Taxpayer is seeking an exemption from the sales and use tax for its purchases of tangible personal property.
RULING
There is no general exemption from the Virginia retail sales and use tax for nonprofit organizations ( see Virginia Regulation (VR) 630-10-74). The only exemptions from the tax are set out in Va. Code § 58.1-608 (copy attached).
Va. Code §58.1-608(4)(I) provides an exemption from the sales and use tax for:
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- Tangible personal property purchased for use or consumption by an organization exempt from taxation under §501(c) (3) of the Internal Revenue Code, and organized primarily for the purpose of operating a state-licensed day-care center or a preschool that hires only certified public school teachers or teachers who are college graduates holding a degree from an accredited four year institution of higher education and certified by an organization recognized by the U.S. Department of Education or by some other nationally recognized organization, and which has a regularly prescribed curriculum.
However, the information submitted by the Taxpayer is insufficient to determine whether the Taxpayer qualifies for an exemption under the above statute.
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 tax, the department has no authority to grant such an exemption. Therefore, the Taxpayer is required to pay the 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.
Should the Taxpayer determine that it meets all of the criteria set forth under Va. Code §58.1-608(4)(I) or any other exemption specified in Va. Code §58.1-608, the Taxpayer may submit additional documentation to the department and request a reconsideration of this ruling.
If you have additional questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner