A. Any nonprofit organization that holds a valid certificate of exemptionfrom the Department of Taxation, or any nonprofit church that holds a validself-executing certificate of exemption, that exempts it from collecting orpaying state and local retail sales or use taxes as of June 30, 2003,pursuant to § 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, or 58.1-609.10,as such sections are in effect on June 30, 2003, shall remain exempt from thecollection or payment of such taxes under the same terms and conditions asprovided under such sections as such sections existed on June 30, 2003,until: (i) July 1, 2007, for such entities that were exempt under §58.1-609.4; (ii) July 1, 2008, for such entities that were exempt under §58.1-609.7; (iii) July 1, 2004, for the first one-half of such entities thatwere exempt under § 58.1-609.8, except churches, which will remain exemptunder the same criteria and procedures in effect for churches on June 30,2003; (iv) July 1, 2005, for the second one-half of such entities that wereexempt under § 58.1-609.8; and (v) July 1, 2006, for such entities that wereexempt under § 58.1-609.9 or under § 58.1-609.10. At the end of theapplicable period of such exemptions, to maintain or renew an exemption forthe period of time set forth in subsection E, each entity must follow theprocedures set forth in subsection B and meet the criteria set forth insubsection C. Provided, however, that any entity that was exempt fromcollecting sales and use tax shall continue to be exempt from suchcollection, and any entity that was exempt from paying sales and use tax forthe purchase of services, as of June 30, 2003, shall continue to be exemptfrom such payment, provided that it follows the other procedures set forth insubsection B and meets the criteria set forth in subsection C. Providedfurther, however, that an educational institution doing business in theCommonwealth which provides a face-to-face educational experience in Americangovernment and was exempt pursuant to subdivision 4 of § 58.1-609.4 frompaying sales and use tax for the purchase of services, as of June 30, 2003,shall continue to be exempt from such payment, provided that it follows theother procedures set forth in subsection B and meets the criteria set forthin subsection C.
B. On and after July 1, 2004, in addition to the organizations described insubsection A, the tax imposed by this chapter or pursuant to the authoritygranted in §§ 58.1-605 and 58.1-606 shall not apply to purchases of tangiblepersonal property for use or consumption by any nonprofit entity that,pursuant to this section, (i) files an appropriate application with theDepartment of Taxation, (ii) meets the applicable criteria, and (iii) isissued a certificate of exemption from the Department of Taxation for theperiod of time covered by the certificate.
C. To qualify for the exemption under subsection B, a nonprofit entity mustmeet the applicable criteria under this subsection as follows:
1. a. The entity is exempt from federal income taxation (i) under § 501(c)(3)of the Internal Revenue Code or (ii) under § 501(c)(4) of the InternalRevenue Code and, if it is exempt under § 501(c)(4) of the Internal RevenueCode, it is organized for a charitable purpose; or
b. The entity has annual gross receipts less than $5,000, and the entity isorganized for at least one of the purposes set forth in § 501(c)(3) of theInternal Revenue Code, or one of the charitable purposes set forth in §501(c)(4) of the Internal Revenue Code; and
2. The entity is in compliance with all applicable state solicitation laws,and where applicable, provides appropriate verification of such compliance;and
3. The entity's annual general administrative costs, including salaries andfundraising, relative to its annual gross revenue, under generally acceptedaccounting principles, is not greater than 40 percent; and
4. If the entity's gross annual revenue was at least $750,000 in the previousyear, then the entity must provide a financial review performed by anindependent certified public accountant. However, for any entity with grossannual revenue of at least $1 million in the previous year, the Departmentmay require that the entity provide a financial audit performed by anindependent certified public accountant. If the Department specificallyrequires an entity with gross annual revenue of at least $1 million in theprevious year to provide a financial audit performed by an independentcertified public accountant, then the entity shall provide such audit inorder to qualify for the exemption under this section, which audit shall bein lieu of the financial review; and
5. If the entity filed a federal 990 or 990 EZ tax form, or the successorforms to such forms, with the Internal Revenue Service, then it must providea copy of such form to the Department of Taxation; and
6. If the entity did not file a federal 990 or 990 EZ tax form, or thesuccessor forms to such forms, with the Internal Revenue Service, then theentity must provide the following information:
a. A list of the Board of Directors or other responsible agents of theentity, composed of at least two individuals, with names and addresses wherethe individuals physically can be found; and
b. The location where the financial records of the entity are available forpublic inspection.
D. On and after July 1, 2004, in addition to the criteria set forth insubsection C, the Department of Taxation shall ask each entity for the totaltaxable purchases made in the preceding year, unless such records are notavailable through no fault of the entity. If the records are not availablethrough no fault of the entity, then the entity must provide such informationto the Department the following year. No information provided pursuant tothis subsection (except the failure to provide available information) shallbe a basis for the Department of Taxation to refuse to exempt an entity.
E. Any entity that is determined under subsections B, C, and D by theDepartment of Taxation to be exempt from paying sales and use tax shall alsobe exempt from collecting sales and use tax, at its election, if (i) theentity is within the same class of organization of any entity that was exemptfrom collecting sales and use tax on June 30, 2003, or (ii) the entity isorganized exclusively to foster, sponsor, and promote physical education,athletic programs, and contests for youths in the Commonwealth.
F. The duration of each exemption granted by the Department of Taxation shallbe no less than five years and no greater than seven years. During the periodof such exemption, the failure of an exempt entity to maintain compliancewith the applicable criteria set forth in subsection C shall constitutegrounds for revocation of the exemption by the Department. At the end of theperiod of such exemption, to maintain or renew the exemption, each entitymust provide the Department of Taxation the same information as required uponinitial exemption and meet the same criteria.
G. For purposes of this section, the Department of Taxation and theDepartment of Agriculture and Consumer Services shall be allowed to shareinformation when necessary to supplement the information required.
(2003, cc. 757, 758; 2004, cc. 515, 536; 2005, cc. 42, 89; 2007, cc. 698,704, 709; 2009, cc. 24, 106, 526.)
A. Any nonprofit organization that holds a valid certificate of exemptionfrom the Department of Taxation, or any nonprofit church that holds a validself-executing certificate of exemption, that exempts it from collecting orpaying state and local retail sales or use taxes as of June 30, 2003,pursuant to § 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, or 58.1-609.10,as such sections are in effect on June 30, 2003, shall remain exempt from thecollection or payment of such taxes under the same terms and conditions asprovided under such sections as such sections existed on June 30, 2003,until: (i) July 1, 2007, for such entities that were exempt under §58.1-609.4; (ii) July 1, 2008, for such entities that were exempt under §58.1-609.7; (iii) July 1, 2004, for the first one-half of such entities thatwere exempt under § 58.1-609.8, except churches, which will remain exemptunder the same criteria and procedures in effect for churches on June 30,2003; (iv) July 1, 2005, for the second one-half of such entities that wereexempt under § 58.1-609.8; and (v) July 1, 2006, for such entities that wereexempt under § 58.1-609.9 or under § 58.1-609.10. At the end of theapplicable period of such exemptions, to maintain or renew an exemption forthe period of time set forth in subsection E, each entity must follow theprocedures set forth in subsection B and meet the criteria set forth insubsection C. Provided, however, that any entity that was exempt fromcollecting sales and use tax shall continue to be exempt from suchcollection, and any entity that was exempt from paying sales and use tax forthe purchase of services, as of June 30, 2003, shall continue to be exemptfrom such payment, provided that it follows the other procedures set forth insubsection B and meets the criteria set forth in subsection C. Providedfurther, however, that an educational institution doing business in theCommonwealth which provides a face-to-face educational experience in Americangovernment and was exempt pursuant to subdivision 4 of § 58.1-609.4 frompaying sales and use tax for the purchase of services, as of June 30, 2003,shall continue to be exempt from such payment, provided that it follows theother procedures set forth in subsection B and meets the criteria set forthin subsection C.
B. On and after July 1, 2004, in addition to the organizations described insubsection A, the tax imposed by this chapter or pursuant to the authoritygranted in §§ 58.1-605 and 58.1-606 shall not apply to purchases of tangiblepersonal property for use or consumption by any nonprofit entity that,pursuant to this section, (i) files an appropriate application with theDepartment of Taxation, (ii) meets the applicable criteria, and (iii) isissued a certificate of exemption from the Department of Taxation for theperiod of time covered by the certificate.
C. To qualify for the exemption under subsection B, a nonprofit entity mustmeet the applicable criteria under this subsection as follows:
1. a. The entity is exempt from federal income taxation (i) under § 501(c)(3)of the Internal Revenue Code or (ii) under § 501(c)(4) of the InternalRevenue Code and, if it is exempt under § 501(c)(4) of the Internal RevenueCode, it is organized for a charitable purpose; or
b. The entity has annual gross receipts less than $5,000, and the entity isorganized for at least one of the purposes set forth in § 501(c)(3) of theInternal Revenue Code, or one of the charitable purposes set forth in §501(c)(4) of the Internal Revenue Code; and
2. The entity is in compliance with all applicable state solicitation laws,and where applicable, provides appropriate verification of such compliance;and
3. The entity's annual general administrative costs, including salaries andfundraising, relative to its annual gross revenue, under generally acceptedaccounting principles, is not greater than 40 percent; and
4. If the entity's gross annual revenue was at least $750,000 in the previousyear, then the entity must provide a financial review performed by anindependent certified public accountant. However, for any entity with grossannual revenue of at least $1 million in the previous year, the Departmentmay require that the entity provide a financial audit performed by anindependent certified public accountant. If the Department specificallyrequires an entity with gross annual revenue of at least $1 million in theprevious year to provide a financial audit performed by an independentcertified public accountant, then the entity shall provide such audit inorder to qualify for the exemption under this section, which audit shall bein lieu of the financial review; and
5. If the entity filed a federal 990 or 990 EZ tax form, or the successorforms to such forms, with the Internal Revenue Service, then it must providea copy of such form to the Department of Taxation; and
6. If the entity did not file a federal 990 or 990 EZ tax form, or thesuccessor forms to such forms, with the Internal Revenue Service, then theentity must provide the following information:
a. A list of the Board of Directors or other responsible agents of theentity, composed of at least two individuals, with names and addresses wherethe individuals physically can be found; and
b. The location where the financial records of the entity are available forpublic inspection.
D. On and after July 1, 2004, in addition to the criteria set forth insubsection C, the Department of Taxation shall ask each entity for the totaltaxable purchases made in the preceding year, unless such records are notavailable through no fault of the entity. If the records are not availablethrough no fault of the entity, then the entity must provide such informationto the Department the following year. No information provided pursuant tothis subsection (except the failure to provide available information) shallbe a basis for the Department of Taxation to refuse to exempt an entity.
E. Any entity that is determined under subsections B, C, and D by theDepartment of Taxation to be exempt from paying sales and use tax shall alsobe exempt from collecting sales and use tax, at its election, if (i) theentity is within the same class of organization of any entity that was exemptfrom collecting sales and use tax on June 30, 2003, or (ii) the entity isorganized exclusively to foster, sponsor, and promote physical education,athletic programs, and contests for youths in the Commonwealth.
F. The duration of each exemption granted by the Department of Taxation shallbe no less than five years and no greater than seven years. During the periodof such exemption, the failure of an exempt entity to maintain compliancewith the applicable criteria set forth in subsection C shall constitutegrounds for revocation of the exemption by the Department. At the end of theperiod of such exemption, to maintain or renew the exemption, each entitymust provide the Department of Taxation the same information as required uponinitial exemption and meet the same criteria.
G. For purposes of this section, the Department of Taxation and theDepartment of Agriculture and Consumer Services shall be allowed to shareinformation when necessary to supplement the information required.
(2003, cc. 757, 758; 2004, cc. 515, 536; 2005, cc. 42, 89; 2007, cc. 698,704, 709; 2009, cc. 24, 106, 526.)
A. Any nonprofit organization that holds a valid certificate of exemptionfrom the Department of Taxation, or any nonprofit church that holds a validself-executing certificate of exemption, that exempts it from collecting orpaying state and local retail sales or use taxes as of June 30, 2003,pursuant to § 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, or 58.1-609.10,as such sections are in effect on June 30, 2003, shall remain exempt from thecollection or payment of such taxes under the same terms and conditions asprovided under such sections as such sections existed on June 30, 2003,until: (i) July 1, 2007, for such entities that were exempt under §58.1-609.4; (ii) July 1, 2008, for such entities that were exempt under §58.1-609.7; (iii) July 1, 2004, for the first one-half of such entities thatwere exempt under § 58.1-609.8, except churches, which will remain exemptunder the same criteria and procedures in effect for churches on June 30,2003; (iv) July 1, 2005, for the second one-half of such entities that wereexempt under § 58.1-609.8; and (v) July 1, 2006, for such entities that wereexempt under § 58.1-609.9 or under § 58.1-609.10. At the end of theapplicable period of such exemptions, to maintain or renew an exemption forthe period of time set forth in subsection E, each entity must follow theprocedures set forth in subsection B and meet the criteria set forth insubsection C. Provided, however, that any entity that was exempt fromcollecting sales and use tax shall continue to be exempt from suchcollection, and any entity that was exempt from paying sales and use tax forthe purchase of services, as of June 30, 2003, shall continue to be exemptfrom such payment, provided that it follows the other procedures set forth insubsection B and meets the criteria set forth in subsection C. Providedfurther, however, that an educational institution doing business in theCommonwealth which provides a face-to-face educational experience in Americangovernment and was exempt pursuant to subdivision 4 of § 58.1-609.4 frompaying sales and use tax for the purchase of services, as of June 30, 2003,shall continue to be exempt from such payment, provided that it follows theother procedures set forth in subsection B and meets the criteria set forthin subsection C.
B. On and after July 1, 2004, in addition to the organizations described insubsection A, the tax imposed by this chapter or pursuant to the authoritygranted in §§ 58.1-605 and 58.1-606 shall not apply to purchases of tangiblepersonal property for use or consumption by any nonprofit entity that,pursuant to this section, (i) files an appropriate application with theDepartment of Taxation, (ii) meets the applicable criteria, and (iii) isissued a certificate of exemption from the Department of Taxation for theperiod of time covered by the certificate.
C. To qualify for the exemption under subsection B, a nonprofit entity mustmeet the applicable criteria under this subsection as follows:
1. a. The entity is exempt from federal income taxation (i) under § 501(c)(3)of the Internal Revenue Code or (ii) under § 501(c)(4) of the InternalRevenue Code and, if it is exempt under § 501(c)(4) of the Internal RevenueCode, it is organized for a charitable purpose; or
b. The entity has annual gross receipts less than $5,000, and the entity isorganized for at least one of the purposes set forth in § 501(c)(3) of theInternal Revenue Code, or one of the charitable purposes set forth in §501(c)(4) of the Internal Revenue Code; and
2. The entity is in compliance with all applicable state solicitation laws,and where applicable, provides appropriate verification of such compliance;and
3. The entity's annual general administrative costs, including salaries andfundraising, relative to its annual gross revenue, under generally acceptedaccounting principles, is not greater than 40 percent; and
4. If the entity's gross annual revenue was at least $750,000 in the previousyear, then the entity must provide a financial review performed by anindependent certified public accountant. However, for any entity with grossannual revenue of at least $1 million in the previous year, the Departmentmay require that the entity provide a financial audit performed by anindependent certified public accountant. If the Department specificallyrequires an entity with gross annual revenue of at least $1 million in theprevious year to provide a financial audit performed by an independentcertified public accountant, then the entity shall provide such audit inorder to qualify for the exemption under this section, which audit shall bein lieu of the financial review; and
5. If the entity filed a federal 990 or 990 EZ tax form, or the successorforms to such forms, with the Internal Revenue Service, then it must providea copy of such form to the Department of Taxation; and
6. If the entity did not file a federal 990 or 990 EZ tax form, or thesuccessor forms to such forms, with the Internal Revenue Service, then theentity must provide the following information:
a. A list of the Board of Directors or other responsible agents of theentity, composed of at least two individuals, with names and addresses wherethe individuals physically can be found; and
b. The location where the financial records of the entity are available forpublic inspection.
D. On and after July 1, 2004, in addition to the criteria set forth insubsection C, the Department of Taxation shall ask each entity for the totaltaxable purchases made in the preceding year, unless such records are notavailable through no fault of the entity. If the records are not availablethrough no fault of the entity, then the entity must provide such informationto the Department the following year. No information provided pursuant tothis subsection (except the failure to provide available information) shallbe a basis for the Department of Taxation to refuse to exempt an entity.
E. Any entity that is determined under subsections B, C, and D by theDepartment of Taxation to be exempt from paying sales and use tax shall alsobe exempt from collecting sales and use tax, at its election, if (i) theentity is within the same class of organization of any entity that was exemptfrom collecting sales and use tax on June 30, 2003, or (ii) the entity isorganized exclusively to foster, sponsor, and promote physical education,athletic programs, and contests for youths in the Commonwealth.
F. The duration of each exemption granted by the Department of Taxation shallbe no less than five years and no greater than seven years. During the periodof such exemption, the failure of an exempt entity to maintain compliancewith the applicable criteria set forth in subsection C shall constitutegrounds for revocation of the exemption by the Department. At the end of theperiod of such exemption, to maintain or renew the exemption, each entitymust provide the Department of Taxation the same information as required uponinitial exemption and meet the same criteria.
G. For purposes of this section, the Department of Taxation and theDepartment of Agriculture and Consumer Services shall be allowed to shareinformation when necessary to supplement the information required.
(2003, cc. 757, 758; 2004, cc. 515, 536; 2005, cc. 42, 89; 2007, cc. 698,704, 709; 2009, cc. 24, 106, 526.)
