Tax Type
Retail Sales and Use Tax
Description
Preschool; Exemption criteria
Topic
Exemptions
Date Issued
03-05-1990
March 5, 1990
Re: Ruling Request: Sales and Use Tax
Dear ****
This has reference to your letter of January 25, 1990 asking whether the ***** (the "taxpayer) qualifies for exemption from the sales and use tax.
FACTS
The taxpayer is a private, non-discriminatory preschool operated during the school year on church premises, using church Sunday school classroom space. In exchange for the use of this space, the taxpayer allows the Sunday school to use its materials, and makes a monthly donation to the church.
Based on the foregoing, you ask whether the taxpayer qualifies for any sales and use tax exemption.
RULING
Since July 1, 1989, the sales and use tax has not applied to "[t]angible 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 purposes of operating a state-licensed day-care center or a preschool that hires only certified Public school teachers, and which has a regularly prescribed curriculum." (Emphasis added)
Therefore, in order for the taxpayer to qualify for this exemption it must:
- be exempt from income taxation under §501(c)(3) of the Internal Revenue Code;
- hire only certified public school teachers; and,
- have a regularly prescribed curriculum.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner