Tax Type
Retail Sales and Use Tax
Description
Nonprofit organizations; Organization promoting education
Topic
Taxability of Persons and Transactions
Date Issued
05-04-1995
May 4, 1995
Re: Request for Ruling: Sales and Use Tax
Dear******************
This will reply to your letter of April 10, 1995 requesting a ruling as to the sales and use tax exemption status of *************( the"Taxpayer").
FACTS
The Taxpayer is a non-profit organization exempt from federal taxation under §501(C) of the Internal Revenue Code. The Taxpayer is a non-partisan organization of representatives from the corporate, education, and public policy sectors. The mission of the Taxpayer is to actively engage all citizens of the Commonwealth in a continuing effort to achieve and sustain excellence in mathematics and science education.
The Taxpayer is beginning a mathematics incentive program for students in grades one through five in every public school in the Commonwealth. Upon completing certain mathematic activities under the direction of public school teachers, students will receive food coupons to local restaurants. The Taxpayer is responsible for the printing and distributing of these activities to the public schools. The Taxpayer also conducts other similar incentive programs in order to meet the mission of obtaining excellence in mathematics and science in the Commonwealth. The Taxpayer is requesting a ruling as to their sales and use tax exemption status.
RULING
There is no general exemption from the retail sales and use tax for non-profit organizations (see Virginia Regulation (VR) 630-10-74 enclosed). The only exemptions from the tax are set out in Code of Virginia §58.1-609.1 through §58.1-609.13. These exemptions include one for non-profit institutions of learning; however, that particular exemption is generally limited to colleges and universities and elementary and secondary schools [see VR 630-10-96 and the Va. Supreme Court's decision in Commonwealth. Dep't. of Taxation v. Progressive Community Club of Washington County. Va.. Inc., 215 Va. 732, 213 S.E.2d 759 (1975)].
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 from the tax, the department has no authority to grant such an exemption.
Therefore, the Taxpayer is required to pay the tax to the retailer on all purchases of tangible personal property if the retailer is registered to collect the tax. If the retailer is not registered to collect the tax, the Taxpayer must report and pay the 4 1/2% use tax on a Consumer Use Tax Return, Form ST-7.
If you should have any further questions, or if I may be of further assistance, please feel free to contact me.
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- Sincerely,
Danny M. Payne
Tax Commissioner
- Sincerely,
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OTP/9622K
Rulings of the Tax Commissioner