95-17 (212195).Ĭode of Virginia §58.1 -602 provides the resale exemption in the definition of retail sale" or"sale at retail." As a registered dealer, the employee organization may purchase exempt of the tax for resale the ingredients used in the baked goods, the hot dogs, buns, condiments, and the cookbooks. As such, the employee organization must pay the tax on the lump sum fee charged by the golf course. While green fees are not taxable in and of themselves because they represent service charges, green fees are subject to the tax when provided in connection with the taxable sale of tangible personal property. Golf packages are taxable when they involve the provision of tangible personal property. The employee organization is charged a lump sum fee by the golf course for green fees, golf carts, food, and prizes. The entrance fee represents an opportunity to play in the tournament and is not subject to the sales tax. The employee organization sponsors a charity golf tournament and solicits an entrance fee from each participant.
The employee organization is correct in paying the tax upon the purchase of such materials. This is another instance in which the employee organization is not engaged in making retail sales, but instead purchases materials for its own use in conducting car washes and walk-a-thons.
Since the Company is purchasing these items and providing them to the employee organization, it is exercising a use over the property and should pay the tax at the time of purchase.
These items are subject to the use tax under Code of Virginia §58.1-604, which imposes a tax upon the use or consumption of tangible personal property in Virginia. The donation jars, paper balloons, and stickers are used and consumed by the employee organization in conducting the fundraising activity. The employee organization is not engaged in making retail sales and is not required to collect the sales tax. Employees who make a contribution are allowed to dress casual and receive a dress casual sticker. In this instance, monetary donations are contributed by customers and the name of the customer is placed on a paper balloon and displayed in the store. In making such sales, the employee organization qualifies as a dealer under Code of Virginia §58.1-612 and must register for the collection and remittance of the sales and use tax pursuant to Code of Virginia §58.1-613, provided the occasional sale exemption is not applicable (see discussion below).ĭonation jars. cookbook salesĬode of Virginia §58.1-603 imposes the sales tax on "each item or article of tangible personal property when sold at retail.in this Commonwealth." When the employee organization makes sales of the above items, it is engaged in making retail sales subject to the sales tax. The Company questions the application of the sales tax to three categories of fundraising activities.īake sales. The fundraising activities vary among the stores. The Company itself does not sponsor the fundraising activities, but supports the efforts of the employees and in some instances makes purchases for the employees on a reimbursement basis. The employees in the individual stores organize and conduct fundraising activities that involve retail sales separate from the sales activity of the Company. The Company operates retail stores in Virginia. i apologize for the delay in responding to your letter. This is in reply to your letter in which you request a ruling on behalf of your client, the "Company," regarding the application of the sales and use tax to fundraising activities by employees of the Company. Re: Request for Ruling: Retail Sales and Use Tax