Tax Type
Retail Sales and Use Tax
Description
Educational institutions; Clearinghouse for educational programming
Topic
Taxability of Persons and Transactions
Date Issued
12-13-1990
December 13, 1990
Dear *********
This will reply to your letter of November 7, 1990, in which you request a ruling whether * * * (the "Taxpayer") qualifies for exemption from the sales and use tax.
FACTS
The Taxpayer, exempt from federal income taxation under Internal Revenue Code § 501(c)(3), is solely membership funded. Its members, through their commitment to the Taxpayer, provide free of charge commercial-free educational television programming and curriculum support materials to public junior and senior high schools as well as free basic cable television service to deliver that programming. The Taxpayer serves as a clearinghouse for information for educators to facilitate the use of television technology.
It seeks exemption from the retail sales and use tax.
RULING
There is no general exemption from the retail sales and use tax for nonprofit organizations. The only exemptions from the tax appear in Va. 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 from the tax, the Department has no authority to grant such an exemption.
Although an exemption exists for noncommercial educational telecommunications entities pursuant to Va. Code § 58.1-608(4)(b), this exemption is for nonprofit noncommercial organizations providing educational programming. Since the Taxpayer acts as a clearinghouse for information and is not actually providing educational programming itself, it is not eligible for this exemption.
Therefore, the Taxpayer is required to pay the tax to the retailer on all purchases of tangible personal property 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 use tax on a Consumer Use Tax Return Form ST-7.
If I can be of further assistance please contact the Department.
Sincerely
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner