[Temslist] Non-profit org sales and use tax exemption

[Tidewater EMS Council Listserv]

Virginia law relating to nonprofit sales and use tax exemption requires a financial audit if the entity's gross annual revenue was $250,000 or greater in the previous year. Delegate Clarke Hogan from South Boston in Southside Virginia was approached by a Volunteer Rescue Squad whose revenue went a little above the $250,000 threshold. This nonprofit learned that a "financial audit" would cost them more than $5,000, thus eliminating the savings from the sales and use tax exemption. Delegate Hogan worked with the Virginia Tax Commissioner and the governor and the following amendment is NOW law for the two years of the 2006-2008 budget.

§3-5.07. SALES AND USE TAX EXEMPTIONS FOR NONPROFIT ORGANIZATIONS

Notwithstanding the provisions of §58.1-609.11 C 4, Code of Virginia, in the case of a nonprofit entity seeking to qualify for a sales and use tax exemption pursuant to §58.1-609.11 B, Code of Virginia, the Department of Taxation shall accept a review of the financial statements performed by an independent certified public accountant in lieu of a full audit, if the entity's gross annual revenue was less than $500,000 in the previous year. Such review is deemed to meet the requirement for a "financial audit" as that term is used and is required in §58.1- 609.11 C 4, Code of Virginia. 
 
 
 
Info provided by the Virginia Network of Nonprofit Organizations VANNO is a member network connecting nonprofit organizations throughout Virginia. VANNO strives to ensure that all Virginia nonprofits are educated, engaged and equipped to serve their communities, and that their voices are heard by public policy makers.  www.vanno.org

 
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