Virginia Administrative Code
Title 23 - TAXATION
Agency 10 - DEPARTMENT OF TAXATION
Chapter 210 - RETAIL SALES AND USE TAX
Section 23VAC10-210-1072 - Nonprofit organizations; purchases for resale; intercompany sales and transfers; occasional sale; change of organization or operations; misuse of exemption certificates

A. Purchases for resale. A purchase of tangible personal property for sale or resale is not subject to the tax. Therefore, a nonprofit organization that is regularly engaged in selling tangible personal property and required to register as a dealer may purchase this tangible personal property exempt from the tax using a resale exemption certificate, Form ST-10.

B. Intercompany sales and transfers. There is no exemption for sales or transfers between separately organized chapters of an organization, including sales to or from a chapter of an organization and its parent organization unless the sale or transfer involves interstate commerce or other transaction which is specifically exempt by statute.

C. Occasional sale. Notwithstanding any other provision of this regulation, a nonprofit organization that is not regularly engaged in selling tangible personal property is not required to register as a dealer and collect the tax on its sales provided it makes sales on three or fewer separate occasions within the calendar year. However, sales made at fairs, flea markets, festivals and carnivals are not considered occasional sales.

D. Change of organization or operations. If a nonprofit organization changes its organizational structure or the nature of its operation in a way that voids its exemption from retail sales and use tax, it is required to register to collect and remit sales tax on retail sales and pay use tax on purchases of tangible personal property or services previously exempted, where applicable, in accordance with § 58.1-612 of the Code of Virginia.

E. Misuse of exemption certificates. Any misuse of exemption certificates will be subject to the penalties prescribed in § 58.1-623.1 of the Code of Virginia, which include a penalty of up to $1,000 or suspension of the use of the exemption for a period of at least one year. In all cases, the person misusing an exemption certificate will be liable for the unpaid tax and interest thereon.