Tax Type
Retail Sales and Use Tax
Description
Nonprofit institution studying health issues; Research and development
Topic
Exemptions
Date Issued
01-11-1990
January 11, 1990
Re: Ruling Request/ Sales and Use Tax
Dear ****
This will reply to your letter dated October 13, 1989 in which you request a sales tax exemption on behalf of ********* ("the Taxpayer").
FACTS
The taxpayer, registered with the Internal Revenue Service as a §401(c)(3) nonprofit tax exempt institution, is a group of medical academicians and researchers studying health issues for the betterment of mankind.
RULING
There is no general exemption from the Virginia retail sales and use tax for nonprofit organizations such as the Taxpayer (see §630-10-74 of Virginia Retail Sales and Use Tax Regulations). However, tangible personal property used directly and exclusively in basic research or research and development in the experimental or laboratory sense may be purchased exempt from the tax. See enclosed Section 630-10-92 of the Virginia Regulations and Form ST-11 with respect to the purchase or lease and use of such personal property. As noted in the regulation, the exemption is limited in its application and therefore, does not apply to all tangible personal property purchased by the taxpayer.
When making exempt purchases, the taxpayer should furnish to each vendor a certificate of exemption. Each certificate explains its use and cannot be used to make a tax-free purchase of any item of tangible personal property not covered by the exact wording of the certificate.
I hope the foregoing has answered your question, however, if you need additional information, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner