W. Va. Code R. § 110-15-72

Current through Register Vol. XLI, No. 24, June 14, 2024

Section 110-15-72 - Organizations Which Qualify or are Qualified Under I.R.C. '501(c)(3) and '501(c)(4) of the Internal Revenue Code

72.1. Sales to Section 501(c)(3) or 501(c)(4) Organizations.

72.1.1. Sales of tangible personal property or services to a bona fide charitable organization which makes no charges for the services it renders are exempt from the consumers sales and service tax and use tax.

72.1.1.1. This exemption applies only to services, equipment, supplies, food for meals and materials which are directly used or consumed by the organization.

72.1.1.2. This exemption does not apply to purchases of gasoline and special fuels.

72.1.1.3. With the exception of purchases of food, this exemption may be claimed by the organization providing its direct payment permit number to the vendor or by the organization paying the tax and claiming a refund from the Tax Department.

72.1.2. Sales of tangible personal property or services to a corporation which charges for its services may be exempt from the consumers sales and service tax and use tax if it has a current registration certificate issued under the authority of W. Va. Code '11-12-1 et seq., it is exempt from federal income taxation as a corporation qualified under I.R.C. '501(c)(3) or '501(c)(4), and it satisfies the requirements of either the following Section 71.1.2.1 or Section 72.1.2.2.

72.1.2.1. A corporation or organization which receives more than one-half of its support from any combination of gifts, grants, direct or indirect "charitable contributions" (as defined in Section 2 of these regulations), or "membership fees" (as defined in Section 2 of these regulations). The other items included in the term "support," as defined in Section 2 of these regulations, regardless of how they may be combined must total less than 50% of all support provided to the corporation or organization in order for its purchases to be exempt.

72.1.2.2. An organization which has no paid employees and its gross income from fund raisers, less reasonable and necessary expenses incurred to raise such gross income (or the tangible personal property or services purchased with such net income) is donated to an organization which is exempt from income taxes under I.R.C. '501(c)(3) or '501(c)(4).

72.1.3. No corporation or organization may avail itself of the exemption in Sections 9.3.10 and 72.1.2 of these regulations unless it has in fact been qualified as a Section 501(c)(3) or Section '501(c)(4) corporation or organization by the Internal Revenue Service however, a corporation which has not been qualified under Section 501(c)(3) or Section '501(c)(4) but which seeks to avail itself of the exemption in Sections 9.4.6 and 72.1.1 of these regulations may seek a written ruling from the Tax Commissioner as provided in Section 72.1.3.1 of these regulations.

72.1.3.1. If the taxpayer seeking to avail itself of the exemption in Sections 9.4.6 and 72.1.1 of these regulations is not, in fact, qualified by the Internal Revenue Service, but does, in fact, meet the requirements for qualification, then such corporation or organization shall file with the State Tax Commissioner a statement, in writing, verified under oath setting forth such information as the Tax Commissioner shall need to make a determination. Such written statement shall be supported by a copy of the corporation's articles of incorporation and by-laws or similar documents in the case of a non-incorporated organization. If the Tax Commissioner believes such proof to be sufficient, he will at his discretion, issue a written ruling granting exemption to such corporation or organization.

72.1.3.2. Where the taxpayer has received a determination or ruling from the Internal Revenue Service that it is exempt from tax under either Section 501(c)(3) or Section '501(c)(4) of the Internal Revenue Code of 1986, as amended, it shall file a copy of such ruling or determination with the West Virginia State Tax Commissioner.

72.1.4. The exemption provided in the foregoing Section 72.1.2 applies only to services, equipment, supplies and materials used or consumed in the activities for which such corporation or organization qualifies as tax exempt under the Internal Revenue Code.

72.1.4.1. This exemption does not apply to sales of gasoline or special fuels.

72.1.4.2. This exemption does not apply to sales of tangible personal property or services to be used or consumed in the generation of unrelated business income as defined in I.R.C. '513.

72.1.5. The corporation or organization may claim the exemption provided in Section 72.1.2 of these regulations by issuing to the vendor a properly completed exemption certificate as provided in Section 6 of these regulations.

72.2. Sales by Section 501(c)(3) or 501(c)(4) Organizations.

72.2.1. A corporation or organization which is exempt under the authority of W. Va. Code '11-15-9(f) from the payment of consumers sales and service tax and use tax on its purchases of tangible personal property or taxable services is per se exempt from the collection and remittance of the consumers sales and service tax and use tax on its "casual and occasional sales" as defined in Section 2 of these regulations.

W. Va. Code R. § 110-15-72