Tax Type
Retail Sales and Use Tax
Description
Sales by nonprofit food bank
Topic
Exemptions
Date Issued
08-02-1991
August 2, 1991
Re: Request for Ruling: Retail Sales and Use Tax
Dear****************
This will reply to your letter of June 3, 1991 in which you request a ruling on the application of the Virginia sales and use tax to transactions engaged in by your client, ************* (the Taxpayer).
FACTS
The Taxpayer is a nonprofit foodbank, exempt from taxation under §501(c)(3) of the Internal Revenue Code, organized exclusively to distribute food to infants, the ill, and the needy. There are two situations that may occur during the normal course of business.
1. The Taxpayer receives donations of nonfood items for resale. The sale of these items is infrequent and for fundraising purposes only.
2. The Taxpayer sponsors an art show once a year. During this event such items as beverages and tee shirts may be sold. This function is held also for fundraising purposes.
You request a ruling on the imposition of sales and use tax to the above situations.
RULING
Va. Code §58.1-608(A)(8)(I) exempts from the retail sales and use tax:
-
- [t]angible personal property for use or consumption by, sold by or donated to a food bank or organization exempt from taxation pursuant to §501(c)(3) of the Internal Revenue Code and organized exclusively for the distribution of foods to infants, the ill, or the needy, said exemptions to apply to each transaction in the chain of commerce from manufacture to final disposition, provided that such food bank or organization is not conducted for profit.
The statute specifically exempts tangible personal property sold by a foodbank. Additionally, the exemption applies to each transaction in the chain of commerce from manufacture to final disposition of the tangible personal property. Based on the information provided and the criteria set forth in the exemption, tangible personal property sold in the instant cases by the Taxpayer is exempt from Virginia sales and use tax.
If you have any further questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner