Current through Register Vol. XLI, No. 38, September 20, 2024
4.1. General Rule. -- The consumers sales and
service tax is imposed upon the sale of tangible personal property or selected
services. All sales are presumed to be taxable unless the sale is either
excepted or exempt from the tax.
4.2. Exemption for Taxable Services Provided
by Certain Community-Based Nonprofit Service Organizations. -- Sales of taxable
services by a community-based nonprofit corporation or organization that meets
the requirements specified in subsection 4.3 of this rule are exempt from
consumers sales tax, unless the gross income derived from the sale is taxable
under Section 511 of the Internal Revenue Code of 1986, as amended.
4.2.1. This exemption does not apply to sales
of tangible personal property.
4.2.2. This exemption does not apply when the
gross income derived from selling the service is taxable under Section 511 of
the Internal Revenue Code.
4.2.3.
This exemption does not apply to the sale of taxable services by a
non-qualifying corporation or organization even though the sale occurs or takes
place through the sponsorship of or at the facilities of the qualifying
corporation or organization. To illustrate, the charges imposed by a business
which provides scuba diving lessons to its students at a YMCA are taxable even
though the YMCA receives a portion of the charges paid by the participants. In
contrast, if the YMCA contracts with a third party to provide scuba diving
lessons at the YMCA's pool but the students contract with the YMCA for the
lessons rather than with the third party, the charges paid by the students will
be exempt.
4.2.4. This exemption
does not apply to a 501(c)(3) hospital or nursing home.
4.3. Requirements for Exemption. -- The
exemption provided in W. Va. Code '11-15-11
does not apply unless the community-based service organization satisfies all of
the requirements specified in this subsection 4.3.
4.3.1. The corporation or organization must
be exempt from federal income tax under Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended.
4.3.1.1.
The corporation or organization must have a determination letter from the
Internal Revenue Service finding that it is exempt from federal income tax
under Section 501(c)(3), and that letter must be in effect for the current
taxable year.
4.3.2. The
corporation or organization must be organized and operated primarily for
charitable or education purposes and its activities and programs must
contribute importantly to (1) promoting the general welfare of youth, families
and the aged, (2) improving health and fitness, and (3) providing recreational
opportunities to the public.
4.3.2.1. The
charitable or educational purposes for which the corporation or organization is
organized must be stated in the corporation's or organization's articles of
incorporation or by-laws.
4.3.2.2.
A corporation or organization is not operated primarily for charitable or
education purposes unless the normal usage of its facilities and programs are
predominantly for charitable or educational purposes, as those terms are
defined in this rule. See Section 3 of this rule.
4.3.3. The corporation or organization must
offer memberships or participation in its programs and activities to the
general public, and the charges, fees or dues for membership or participation
must allow its programs and activities to be accessible by a reasonable
cross-section of the community.
4.3.3.1. The
programs and activities of the corporation or organization must be available to
the general public, regardless of ability to pay for participation.
4.3.3.2. The memberships, programs and
activities must be obtainable regardless of race, creed, color or national
origin.
4.3.4. The
corporation or organization must offer financial assistance, on a regular and
on-going basis, to individuals unable to afford the corporation's or
organization's membership dues, or its fees or charges, imposed for
participation in any of its programs or activities.
4.3.4.1. The corporation or organization must
have official guidelines or rules on eligibility for financial
assistance.
4.3.4.2. While the
corporation or organization may require sufficient information to satisfy it
that financial assistance is needed, the standards for determining the awarding
of financial assistance may not be such that only those individuals who are
destitute qualify for such assistance.
4.3.4.3. Financial assistance to qualifying
individuals may take the form of reduced dues, fees or charges, or the
provision of free taxable services.
4.4. Method of Claiming Exemption. -- A
community-based nonprofit service organization or corporation that qualifies
for this exemption is not required to obtain an exemption certificate or any
other proof of exemption from persons participating in the organization's tax
exempt activities.
4.5.
Organization Required to Keep Accurate Records. -- A community-based nonprofit
service organization is required to keep accurate books and records to support
the accuracy of gross receipts it claims are exempt from consumers sales tax
and the basis for the exemption(s) claimed.
4.6. Effective Date of Exemption. --
Exemption '11-15-11 takes effect June 5, 1992.
