Tax Type
Retail Sales and Use Tax
Description
Nonprofit organization; Arts; Exemption criteria
Topic
Exemptions
Property Subject to Tax
Date Issued
02-11-1991
February 11, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear***********
This will reply to your letter of November 14, 1990, in which you request a ruling on whether the************* (the Taxpayer) qualifies for exemption from the Virginia retail sales and use tax.
FACTS
The Taxpayer is a nonprofit organization exempt from taxation under §501(C)(3) of the Internal Revenue Code, organized to support the purposes and programs of the national******* encourage and strengthen the arts at all educational levels in the Commonwealth, and cooperate with appropriate state agencies and organizations and national agencies for the encouragement of the arts. The Taxpayer seeks 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. The only exemptions from the tax are set out in Va. Code §58.1-608 (copy attached).
Va. Code §58.1-608(4)(m) provides an exemption from the sales and use tax for:
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- From July 1, 1990, until June 30, 1991, tangible personal property purchased for use or consumption by a nonprofit organization exempt from taxation under §501(C)(3) of the Internal Revenue Code and organized primarily for the purpose of operating an arts center offering a year-round schedule of art education classes for adults and children, a continuous series of exhibits focusing on twentieth century art, and sponsoring a wide range of seminars for the public at no or nominal charge.
However, based on the information provided by the taxpayer, the Taxpayer's advocacy activities and production and distribution of promotional materials are insufficient to qualify for this exemption.
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 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 S-7.
If you have any further questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner