Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations; Exemption criteria
Topic
Exemptions
Taxability of Persons and Transactions
Date Issued
12-27-1990
December 27, 1990
Re: Request for Rulings: Sales and Use Tax
Dear ****
This will reply to your letters of August 28, 1990 in which You request rulings whether the ************************** ("Taxpayer 2") qualify for exemption from sales and use tax.
FACTS
The Taxpayers are nonprofit organizations exempt from federal income taxation under Internal Revenue Code §501(c)(3). Taxpayer 1 was established to carry on educational, literary, scientific and charitable purposes including giving scholarships to deserving individuals, furthering the improvement or development of the capabilities of individual business and professional women by means of lectures, etc. Taxpayer 2 was established to promote the interests of business and professional women in Virginia. You request that if the organizations themselves do not qualify for exemption, they at least be exempt with respect to their quarterly publications, brochures, reports, and similar printed materials.
RULING
There is no general exemption from the Virginia Retail Sales and Use Tax for nonprofit organizations. The only exemptions from the tax are set out in Va. Code §58.1-608, copy enclosed. While I am mindful of the worthwhile purpose the Taxpayers serve, absent a statutory exemption that would allow the Taxpayers to make purchases exempt from the tax, the department has no authority to grant such an exemption.
However, Va. Code §58.1-608(3)(b)(v) provides that the retail sales and use tax does not apply to:
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- equipment, printing or supplies used directly to produce a publication described in subdivision 6 c whether it is ultimately sold at retail or for resale or distribution at no cost.
A publication is "described in subdivision 6 c" as
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- [a]ny publication issued daily, or regularly at average intervals not exceeding three months, and advertising supplements and any other printed matter ultimately distributed with or as part of such publications, except that newsstand sales of the same are taxable.
In order to qualify for this exemption, Virginia Regulation 630-10-73, copy enclosed, provides that a publication must be issued daily or at average intervals not exceeding three months and must be a compilation of information available to the general public. A review of the Taxpayers' publication, Federation Notes, reveals that it would qualify for the publication exemption. Thus, purchases of tangible personal property used directly to produce this publication are exempt from the tax. However, tangible personal property purchased for use with the Taxpayers' other printed materials, including brochures, reports, etc., are not exempt.
While you mentioned the Taxpayers' brochures, reports, and similar printed materials possibly qualifying for exemption under Va. Code §58.1-608(6)(d), please note that this exemption is limited to "[c]atalogs, letters, brochures, reports,...when stored for twelve months or less in the Commonwealth and distributed for use without the Commonwealth." Thus, this exemption does not apply to printed material that is mailed to the Taxpayers' members in Virginia.
If you have any further questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner