Tax Type
Retail Sales and Use Tax
Description
Educational Institutions; Nonprofit Elementary and Secondary School
Topic
Taxability of Persons and Transactions
Date Issued
02-20-1991
February 20, 1991
Re: Request for Ruling: Sales and Use Tax
Dear******************
This will reply to your letter of January 3, 1991 in which you request a ruling as to whether*********** (the "School") qualifies for exemption from the retail sales and use tax.
FACTS
The School, a nonprofit organization exempt from federal taxation under Internal Revenue Code § 501(c)(3), is a private school for grades 6-12 located in another state. Many of its students, however, live in Virginia. It seeks exemption from the Virginia retail sales and use tax.
RULING
Va. Code § 58.1-608(4)(b) provides an exemption from the sales and use tax for "tangible personal property for use or consumption by a college or other institution of learning ... provided that such college, institution of learning ... is not conducted for profit."
Based on the information provided, I find that your organization qualifies for the exemption cited above. Please note that this exemption is limited to purchases of tangible personal property for use and consumption by the School when paid for with school funds. The exemption is not applicable to purchases of meals and lodging since they are for use and consumption by the individuals who receive them and not the School. Additionally, it is not applicable to purchases of tangible personal property paid for out of funds other than school funds, except for purchases by a school of tangible personal property, such as athletic equipment, band instruments, etc., to be paid for out of school activity funds and which become the property of the school.
The School also qualifies for exemption under Va. Code § 58.1-608(4)(h) which exempts both purchases and sales of tangible personal property in connection with fund-raising activities of a nonprofit elementary or secondary school and school-affiliated organizations. Specifically, this exemption is for:
-
- tangible personal property purchased for use, consumption or sale at retail by an elementary or secondary school conducted not for profit, or Parent Teacher Association or other group associated with an elementary or secondary school conducted not for profit for use in fund-raising activities, the net proceeds (gross receipts less direct expenses) of which are contributed directly to the school or used to purchase certified school equipment, and certified school equipment purchased by such groups for contribution directly to the school...Notwithstanding the other provisions of this subdivision, the tax shall not apply to the sale of class rings, school photographs, and other fund-raising programs from which an elementary or secondary school conducted not for profit receives a commission or the net proceeds after the payment of vendors and other direct expenses.
- tangible personal property purchased for use, consumption or sale at retail by an elementary or secondary school conducted not for profit, or Parent Teacher Association or other group associated with an elementary or secondary school conducted not for profit for use in fund-raising activities, the net proceeds (gross receipts less direct expenses) of which are contributed directly to the school or used to purchase certified school equipment, and certified school equipment purchased by such groups for contribution directly to the school...Notwithstanding the other provisions of this subdivision, the tax shall not apply to the sale of class rings, school photographs, and other fund-raising programs from which an elementary or secondary school conducted not for profit receives a commission or the net proceeds after the payment of vendors and other direct expenses.
If you have any further questions, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner