{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/58.1-609.11.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/58.1-609.11.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/58.1-609.11.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/58.1-609.11.html"}],"law_id":64022,"edition_id":1,"section_id":64022,"structure_id":12899,"section_number":"58.1-609.11","catch_line":"Exemptions for nonprofit entities","history":"2003, cc. 757, 758; 2004, cc. 515, 536; 2005, cc. 42, 89; 2007, cc. 698, 704, 709; 2009, cc. 24, 106, 526; 2016, c. 487; 2019, c. 20; 2024, c. 287.","full_text":"A\n\nFor purposes of this section, “nonprofit organization” or “nonprofit entity” means an entity that meets the requirements of subsection D. “Nonprofit organization” or “nonprofit entity” includes a single member limited liability company whose sole member is a nonprofit organization.B\n\nAny nonprofit organization that holds a valid certificate of exemption from the Department of Taxation, or any nonprofit church that holds a valid self-executing certificate of exemption, that exempts it from collecting or paying state and local retail sales or use taxes as of June 30, 2003, pursuant to § 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, or 58.1-609.10, as such sections are in effect on June 30, 2003, shall remain exempt from the collection or payment of such taxes under the same terms and conditions as provided under such sections as such sections existed on June 30, 2003, until: (i) July 1, 2007, for such entities that were exempt under § 58.1-609.4; (ii) July 1, 2008, for such entities that were exempt under § 58.1-609.7; (iii) July 1, 2004, for the first one-half of such entities that were exempt under § 58.1-609.8, except churches, which will remain exempt under the same criteria and procedures in effect for churches on June 30, 2003; (iv) July 1, 2005, for the second one-half of such entities that were exempt under § 58.1-609.8; and (v) July 1, 2006, for such entities that were exempt under § 58.1-609.9 or under § 58.1-609.10. At the end of the applicable period of such exemptions, to maintain or renew an exemption for the period of time set forth in subsection G, each entity must follow the procedures set forth in subsection C and meet the criteria set forth in subsection D. Provided, however, that any entity that was exempt from collecting sales and use tax shall continue to be exempt from such collection, and any entity that was exempt from paying sales and use tax for the purchase of services, as of June 30, 2003, shall continue to be exempt from such payment, provided that it follows the other procedures set forth in subsection C and meets the criteria set forth in subsection D. Provided further, however, that an educational institution doing business in the Commonwealth which provides a face-to-face educational experience in American government and was exempt pursuant to subdivision 4 of § 58.1-609.4 from paying sales and use tax for the purchase of services, as of June 30, 2003, shall continue to be exempt from such payment, provided that it follows the other procedures set forth in subsection C and meets the criteria set forth in subsection D.C\n\n1. On and after July 1, 2004, in addition to the organizations described in subsection B, and except as restricted in subdivision 2, the tax imposed by this chapter or pursuant to the authority granted in \u00a7\u00a7 58.1-605 and 58.1-606 shall not apply to purchases of tangible personal property for use or consumption by any nonprofit entity that, pursuant to this section, (i) files an appropriate application with the Department of Taxation, (ii) meets the applicable criteria, and (iii) is issued a certificate of exemption from the Department of Taxation for the period of time covered by the certificate.2\n\nIf the entity that is exempt under this section is exempt from federal income tax under § 501(c)(19) of the Internal Revenue Code, or has annual gross receipts of less than $5,000 and is organized for at least one of the purposes set forth in § 501(c)(19) of the Internal Revenue Code, then the exemption under this section for such entity shall not apply to purchases of tangible personal property that are used primarily (i) for social and recreational activities for members or (ii) for providing insurance benefits to members or members’ dependents.D\n\nTo qualify for the exemption under subsection C, a nonprofit entity must meet the applicable criteria under this subsection as follows:1\n\na. The entity is exempt from federal income taxation (i) under § 501(c)(3) of the Internal Revenue Code; (ii) under § 501(c)(4) of the Internal Revenue Code and is organized for a charitable purpose; or (iii) under § 501(c)(19) of the Internal Revenue Code; or\n\t\t\t\tb. The entity has annual gross receipts of less than $5,000, and the entity is organized for at least one of the purposes set forth in § 501(c)(3) of the Internal Revenue Code, one of the charitable purposes set forth in § 501(c)(4) of the Internal Revenue Code, or one of the purposes set forth in § 501(c)(19) of the Internal Revenue Code; and2\n\nThe entity is in compliance with all applicable state solicitation laws and, where applicable, provides appropriate verification of such compliance; and3\n\nThe entity’s annual general administrative costs, including salaries and fundraising, relative to its annual gross revenue, under generally accepted accounting principles, is not greater than 40 percent; and4\n\nIf the entity’s gross annual revenue was at least $750,000 in the previous year, then the entity must provide a financial review performed by an independent certified public accountant. However, for any entity with gross annual revenue of at least $1.5 million in the previous year, the Department may require that the entity provide a financial audit performed by an independent certified public accountant. If the Department specifically requires an entity with gross annual revenue of at least $1.5 million in the previous year to provide a financial audit performed by an independent certified public accountant, then the entity shall provide such audit in order to qualify for the exemption under this section, which audit shall be in lieu of the financial review; and5\n\nIf the entity filed a federal 990 or 990 EZ tax form, or the successor forms to such forms, with the Internal Revenue Service, then it must provide a copy of such form to the Department of Taxation; and6\n\nIf the entity did not file a federal 990 or 990 EZ tax form, or the successor forms to such forms, with the Internal Revenue Service, then the entity must provide the following information:\n\t\t\t\ta. A list of the Board of Directors or other responsible agents of the entity, composed of at least two individuals, with names and addresses where the individuals physically can be found; and\n\t\t\t\tb. The location where the financial records of the entity are available for public inspection.E\n\nOn and after July 1, 2004, in addition to the criteria set forth in subsection D, the Department of Taxation shall ask each entity for the total taxable purchases made in the preceding year, unless such records are not available through no fault of the entity. If the records are not available through no fault of the entity, then the entity must provide such information to the Department the following year. No information provided pursuant to this subsection (except the failure to provide available information) shall be a basis for the Department of Taxation to refuse to exempt an entity.F\n\nAny entity that is determined under subsections C, D, and E by the Department of Taxation to be exempt from paying sales and use tax shall also be exempt from collecting sales and use tax, at its election, if (i) the entity is within the same class of organization of any entity that was exempt from collecting sales and use tax on June 30, 2003, or (ii) the entity is organized exclusively to foster, sponsor, and promote physical education, athletic programs, and contests for youths in the Commonwealth.G\n\nThe duration of each exemption granted by the Department of Taxation shall be no less than five years and no greater than seven years. During the period of such exemption, the failure of an exempt entity to maintain compliance with the applicable criteria set forth in subsection D shall constitute grounds for revocation of the exemption by the Department. At the end of the period of such exemption, to maintain or renew the exemption, each entity must provide the Department of Taxation the same information as required upon initial exemption and meet the same criteria.H\n\nFor purposes of this section, the Department of Taxation and the Department of Agriculture and Consumer Services shall be allowed to share information when necessary to supplement the information required.","order_by":null,"text":{"0":{"id":233106,"text":"For purposes of this section, “nonprofit organization” or “nonprofit entity” means an entity that meets the requirements of subsection D. “Nonprofit organization” or “nonprofit entity” includes a single member limited liability company whose sole member is a nonprofit organization.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":233107,"text":"Any nonprofit organization that holds a valid certificate of exemption from the Department of Taxation, or any nonprofit church that holds a valid self-executing certificate of exemption, that exempts it from collecting or paying state and local retail sales or use taxes as of June 30, 2003, pursuant to § 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, or 58.1-609.10, as such sections are in effect on June 30, 2003, shall remain exempt from the collection or payment of such taxes under the same terms and conditions as provided under such sections as such sections existed on June 30, 2003, until: (i) July 1, 2007, for such entities that were exempt under § 58.1-609.4; (ii) July 1, 2008, for such entities that were exempt under § 58.1-609.7; (iii) July 1, 2004, for the first one-half of such entities that were exempt under § 58.1-609.8, except churches, which will remain exempt under the same criteria and procedures in effect for churches on June 30, 2003; (iv) July 1, 2005, for the second one-half of such entities that were exempt under § 58.1-609.8; and (v) July 1, 2006, for such entities that were exempt under § 58.1-609.9 or under § 58.1-609.10. At the end of the applicable period of such exemptions, to maintain or renew an exemption for the period of time set forth in subsection G, each entity must follow the procedures set forth in subsection C and meet the criteria set forth in subsection D. Provided, however, that any entity that was exempt from collecting sales and use tax shall continue to be exempt from such collection, and any entity that was exempt from paying sales and use tax for the purchase of services, as of June 30, 2003, shall continue to be exempt from such payment, provided that it follows the other procedures set forth in subsection C and meets the criteria set forth in subsection D. Provided further, however, that an educational institution doing business in the Commonwealth which provides a face-to-face educational experience in American government and was exempt pursuant to subdivision 4 of § 58.1-609.4 from paying sales and use tax for the purchase of services, as of June 30, 2003, shall continue to be exempt from such payment, provided that it follows the other procedures set forth in subsection C and meets the criteria set forth in subsection D.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":233108,"text":"1. On and after July 1, 2004, in addition to the organizations described in subsection B, and except as restricted in subdivision 2, the tax imposed by this chapter or pursuant to the authority granted in \u00a7\u00a7 58.1-605 and 58.1-606 shall not apply to purchases of tangible personal property for use or consumption by any nonprofit entity that, pursuant to this section, (i) files an appropriate application with the Department of Taxation, (ii) meets the applicable criteria, and (iii) is issued a certificate of exemption from the Department of Taxation for the period of time covered by the certificate.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"C2"},"3":{"id":233109,"text":"If the entity that is exempt under this section is exempt from federal income tax under § 501(c)(19) of the Internal Revenue Code, or has annual gross receipts of less than $5,000 and is organized for at least one of the purposes set forth in § 501(c)(19) of the Internal Revenue Code, then the exemption under this section for such entity shall not apply to purchases of tangible personal property that are used primarily (i) for social and recreational activities for members or (ii) for providing insurance benefits to members or members’ dependents.","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C","next_prefix":"D"},"4":{"id":233110,"text":"To qualify for the exemption under subsection C, a nonprofit entity must meet the applicable criteria under this subsection as follows:","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C2","next_prefix":"D1"},"5":{"id":233111,"text":"a. The entity is exempt from federal income taxation (i) under § 501(c)(3) of the Internal Revenue Code; (ii) under § 501(c)(4) of the Internal Revenue Code and is organized for a charitable purpose; or (iii) under § 501(c)(19) of the Internal Revenue Code; or\n\t\t\t\tb. The entity has annual gross receipts of less than $5,000, and the entity is organized for at least one of the purposes set forth in § 501(c)(3) of the Internal Revenue Code, one of the charitable purposes set forth in § 501(c)(4) of the Internal Revenue Code, or one of the purposes set forth in § 501(c)(19) of the Internal Revenue Code; and","type":"section","prefixes":["D","1"],"prefix":"1","entire_prefix":"D1","prefix_anchor":"D1","level":2,"prior_prefix":"D","next_prefix":"D2"},"6":{"id":233112,"text":"The entity is in compliance with all applicable state solicitation laws and, where applicable, provides appropriate verification of such compliance; and","type":"section","prefixes":["D","2"],"prefix":"2","entire_prefix":"D2","prefix_anchor":"D2","level":2,"prior_prefix":"D1","next_prefix":"D3"},"7":{"id":233113,"text":"The entity’s annual general administrative costs, including salaries and fundraising, relative to its annual gross revenue, under generally accepted accounting principles, is not greater than 40 percent; and","type":"section","prefixes":["D","3"],"prefix":"3","entire_prefix":"D3","prefix_anchor":"D3","level":2,"prior_prefix":"D2","next_prefix":"D4"},"8":{"id":233114,"text":"If the entity’s gross annual revenue was at least $750,000 in the previous year, then the entity must provide a financial review performed by an independent certified public accountant. However, for any entity with gross annual revenue of at least $1.5 million in the previous year, the Department may require that the entity provide a financial audit performed by an independent certified public accountant. If the Department specifically requires an entity with gross annual revenue of at least $1.5 million in the previous year to provide a financial audit performed by an independent certified public accountant, then the entity shall provide such audit in order to qualify for the exemption under this section, which audit shall be in lieu of the financial review; and","type":"section","prefixes":["D","4"],"prefix":"4","entire_prefix":"D4","prefix_anchor":"D4","level":2,"prior_prefix":"D3","next_prefix":"D5"},"9":{"id":233115,"text":"If the entity filed a federal 990 or 990 EZ tax form, or the successor forms to such forms, with the Internal Revenue Service, then it must provide a copy of such form to the Department of Taxation; and","type":"section","prefixes":["D","5"],"prefix":"5","entire_prefix":"D5","prefix_anchor":"D5","level":2,"prior_prefix":"D4","next_prefix":"D6"},"10":{"id":233116,"text":"If the entity did not file a federal 990 or 990 EZ tax form, or the successor forms to such forms, with the Internal Revenue Service, then the entity must provide the following information:\n\t\t\t\ta. A list of the Board of Directors or other responsible agents of the entity, composed of at least two individuals, with names and addresses where the individuals physically can be found; and\n\t\t\t\tb. The location where the financial records of the entity are available for public inspection.","type":"section","prefixes":["D","6"],"prefix":"6","entire_prefix":"D6","prefix_anchor":"D6","level":2,"prior_prefix":"D5","next_prefix":"E"},"11":{"id":233117,"text":"On and after July 1, 2004, in addition to the criteria set forth in subsection D, the Department of Taxation shall ask each entity for the total taxable purchases made in the preceding year, unless such records are not available through no fault of the entity. If the records are not available through no fault of the entity, then the entity must provide such information to the Department the following year. No information provided pursuant to this subsection (except the failure to provide available information) shall be a basis for the Department of Taxation to refuse to exempt an entity.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D6","next_prefix":"F"},"12":{"id":233118,"text":"Any entity that is determined under subsections C, D, and E by the Department of Taxation to be exempt from paying sales and use tax shall also be exempt from collecting sales and use tax, at its election, if (i) the entity is within the same class of organization of any entity that was exempt from collecting sales and use tax on June 30, 2003, or (ii) the entity is organized exclusively to foster, sponsor, and promote physical education, athletic programs, and contests for youths in the Commonwealth.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"13":{"id":233119,"text":"The duration of each exemption granted by the Department of Taxation shall be no less than five years and no greater than seven years. During the period of such exemption, the failure of an exempt entity to maintain compliance with the applicable criteria set forth in subsection D shall constitute grounds for revocation of the exemption by the Department. At the end of the period of such exemption, to maintain or renew the exemption, each entity must provide the Department of Taxation the same information as required upon initial exemption and meet the same criteria.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"14":{"id":233120,"text":"For purposes of this section, the Department of Taxation and the Department of Agriculture and Consumer Services shall be allowed to share information when necessary to supplement the information required.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G"}},"ancestry":[{"id":12899,"edition_id":1,"name":"Retail Sales and Use Tax","identifier":"6","label":"chapter","depth":3,"order_by":1,"parent_id":12837,"metadata":{},"date_created":"2026-06-26 03:43:59","date_modified":"2026-06-26 03:43:59","permalink":{"id":254543,"object_type":"structure","relational_id":12899,"identifier":"6","token":"58.1\/I\/6","url":"\/58.1\/I\/6\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12837,"edition_id":1,"name":"Taxes Administered by the Department of Taxation","identifier":"I","label":"subtitle","depth":2,"order_by":1,"parent_id":12703,"metadata":{},"date_created":"2026-06-26 03:43:55","date_modified":"2026-06-26 03:43:55","permalink":{"id":252075,"object_type":"structure","relational_id":12837,"identifier":"I","token":"58.1\/I","url":"\/58.1\/I\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12703,"edition_id":1,"name":"Taxation","identifier":"58.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":251959,"object_type":"structure","relational_id":12703,"identifier":"58.1","token":"58.1","url":"\/58.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":63208,"structure_id":12899,"section_number":"58.1-600","catch_line":"Short title","url":"\/58.1-600\/","token":"58.1\/I\/6\/58.1-600","metadata":false},{"id":54017,"structure_id":12899,"section_number":"58.1-601","catch_line":"Administration of chapter","url":"\/58.1-601\/","token":"58.1\/I\/6\/58.1-601","metadata":false},{"id":78097,"structure_id":12899,"section_number":"58.1-602","catch_line":"Definitions","url":"\/58.1-602\/","token":"58.1\/I\/6\/58.1-602","metadata":false},{"id":75736,"structure_id":12899,"section_number":"58.1-602.1","catch_line":"Repealed","url":"\/58.1-602.1\/","token":"58.1\/I\/6\/58.1-602.1","metadata":false},{"id":81537,"structure_id":12899,"section_number":"58.1-603","catch_line":"(Contingent effective date) Imposition of sales 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exemptions","url":"\/58.1-609.10\/","token":"58.1\/I\/6\/58.1-609.10","metadata":false},"next_section":{"id":68864,"structure_id":12899,"section_number":"58.1-609.12","catch_line":"Reports to General Assembly on tax exemptions studies","url":"\/58.1-609.12\/","token":"58.1\/I\/6\/58.1-609.12","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/58.1-609.11\/","history_text":"

This law was first created in 2003. The record of its establishment is cataloged in chapters 757<\/a> and 758<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 7 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 2004, chapters 515<\/a> and 536<\/a>; in 2005, chapters 42<\/a> and 89<\/a>; in 2007, chapters 698<\/a>, 704<\/a>, and 709<\/a>; in 2009, chapters 24<\/a>, 106<\/a>, and 526<\/a>; in 2016, chapter 487<\/a>; in 2019, chapter 20<\/a>; in 2024, chapter 287<\/a>.<\/p>","references":[{"id":68568,"section_number":"15.2-1104.1","catch_line":"Tax on admissions to charitable events","order_by":null,"url":"\/15.2-1104.1\/"},{"id":57817,"section_number":"58.1-3","catch_line":"Secrecy of information; penalties","order_by":null,"url":"\/58.1-3\/"},{"id":78838,"section_number":"58.1-3510.7","catch_line":"Exemptions; penalties","order_by":null,"url":"\/58.1-3510.7\/"},{"id":67849,"section_number":"58.1-608.1","catch_line":"Refund authorized for certain building materials","order_by":null,"url":"\/58.1-608.1\/"},{"id":74403,"section_number":"58.1-609.10","catch_line":"Miscellaneous exemptions","order_by":null,"url":"\/58.1-609.10\/"},{"id":68864,"section_number":"58.1-609.12","catch_line":"Reports to General Assembly on tax exemptions studies","order_by":null,"url":"\/58.1-609.12\/"},{"id":69079,"section_number":"58.1-623","catch_line":"Sales or leases presumed subject to tax; exemption certificates","order_by":null,"url":"\/58.1-623\/"}],"refers_to":[{"id":64845,"section_number":"58.1-605","catch_line":"To what extent and under what conditions cities and counties may levy local sales taxes; collection thereof by Commonwealth and return of revenue to each city or county entitled thereto","order_by":null,"url":"\/58.1-605\/"},{"id":85798,"section_number":"58.1-606","catch_line":"To what extent and under what conditions cities and counties may levy local use tax; collection thereof by Commonwealth and return of revenues to the cities and counties","order_by":null,"url":"\/58.1-606\/"},{"id":74403,"section_number":"58.1-609.10","catch_line":"Miscellaneous exemptions","order_by":null,"url":"\/58.1-609.10\/"},{"id":86819,"section_number":"58.1-609.4","catch_line":"Repealed","order_by":null,"url":"\/58.1-609.4\/"},{"id":65082,"section_number":"58.1-609.7","catch_line":"Repealed","order_by":null,"url":"\/58.1-609.7\/"}],"permalink":{"id":254653,"object_type":"law","relational_id":64022,"identifier":"58.1-609.11","token":"58.1\/I\/6\/58.1-609.11","url":"\/58.1-609.11\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/58.1-609.11\/","token":"58.1\/I\/6\/58.1-609.11","dublin_core":{"Title":"Exemptions for nonprofit entities","Type":"Text","Format":"text\/html","Identifier":"\u00a7 58.1-609.11","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> For purposes of this section, “nonprofit organization<\/span>” or “nonprofit entity<\/span>” means an entity that meets the requirements of subsection D. “Nonprofit organization<\/span>” or “nonprofit entity<\/span>” includes a single member limited liability company whose sole member is a nonprofit organization<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> Any nonprofit organization<\/span> that holds a valid certificate of exemption from the Department<\/span> of Taxation, or any nonprofit church that holds a valid self-executing certificate of exemption, that exempts it from collecting or paying state and local retail sales<\/span> or use<\/span> taxes as of June 30, 2003, pursuant to § 58.1-609.4<\/a>, 58.1-609.7<\/a>, 58.1-609.8, 58.1-609.9, or 58.1-609.10<\/a>, as such sections are in effect on June 30, 2003, shall remain exempt from the collection or payment of such taxes under the same terms and conditions as provided under such sections as such sections existed on June 30, 2003, until: (i) July 1, 2007, for such entities that were exempt under § 58.1-609.4<\/a>; (ii) July 1, 2008, for such entities that were exempt under § 58.1-609.7<\/a>; (iii) July 1, 2004, for the first one-half of such entities that were exempt under § 58.1-609.8, except churches, which will remain exempt under the same criteria and procedures in effect for churches on June 30, 2003; (iv) July 1, 2005, for the second one-half of such entities that were exempt under § 58.1-609.8; and (v) July 1, 2006, for such entities that were exempt under § 58.1-609.9 or under § 58.1-609.10<\/a>. At the end of the applicable period of such exemptions, to maintain or renew an exemption for the period of time set forth in subsection G, each entity must follow the procedures set forth in subsection C and meet the criteria set forth in subsection D. Provided, however, that any entity that was exempt from collecting sales and use<\/span> tax shall continue to be exempt from such collection, and any entity that was exempt from paying sales and use<\/span> tax for the purchase of services, as of June 30, 2003, shall continue to be exempt from such payment, provided that it follows the other procedures set forth in subsection C and meets the criteria set forth in subsection D. Provided further, however, that an educational institution doing business<\/span> in the Commonwealth<\/span> which provides a face-to-face educational experience in American government and was exempt pursuant to subdivision 4 of § 58.1-609.4<\/a> from paying sales and use<\/span> tax for the purchase of services, as of June 30, 2003, shall continue to be exempt from such payment, provided that it follows the other procedures set forth in subsection C and meets the criteria set forth in subsection D. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> 1. On and after July 1, 2004, in addition to the organizations described in subsection B, and except as restricted in subdivision 2, the tax imposed by this chapter or pursuant to the authority granted in \u00a7\u00a7 58.1-605<\/a> and 58.1-606<\/a> shall not apply to purchases of tangible personal property<\/span> for use<\/span> or consumption by any nonprofit entity<\/span> that, pursuant to this section, (i) files an appropriate application with the Department<\/span> of Taxation, (ii) meets the applicable criteria, and (iii) is issued a certificate of exemption from the Department<\/span> of Taxation for the period of time covered by the certificate. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> If the entity that is exempt under this section is exempt from federal income tax under § 501(c)(19) of the Internal Revenue Code, or has annual gross receipts of less than $5,000 and is organized for at least one of the purposes set forth in § 501(c)(19) of the Internal Revenue Code, then the exemption under this section for such entity shall not apply to purchases of tangible personal property<\/span> that are used primarily (i) for social and recreational activities for members or (ii) for providing insurance benefits to members or members’ dependents. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> To qualify for the exemption under subsection C, a nonprofit entity<\/span> must meet the applicable criteria under this subsection as follows: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> a. The entity is exempt from federal income taxation (i) under § 501(c)(3) of the Internal Revenue Code; (ii) under § 501(c)(4) of the Internal Revenue Code and is organized for a charitable purpose; or (iii) under § 501(c)(19) of the Internal Revenue Code; or\n\t\t\t\tb. The entity has annual gross receipts of less than $5,000, and the entity is organized for at least one of the purposes set forth in § 501(c)(3) of the Internal Revenue Code, one of the charitable purposes set forth in § 501(c)(4) of the Internal Revenue Code, or one of the purposes set forth in § 501(c)(19) of the Internal Revenue Code; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The entity is in compliance with all applicable state solicitation laws<\/span> and, where applicable, provides appropriate verification of such compliance; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The entity’s annual general administrative costs, including salaries and fundraising, relative to its annual gross revenue, under generally accepted accounting principles, is not greater than 40 percent; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> If the entity’s gross annual revenue was at least $750,000 in the previous year, then the entity must provide a financial review performed by an independent certified public accountant. However, for any entity with gross annual revenue of at least $1.5 million in the previous year, the Department<\/span> may require that the entity provide a financial audit performed by an independent certified public accountant. If the Department<\/span> specifically requires an entity with gross annual revenue of at least $1.5 million in the previous year to provide a financial audit performed by an independent certified public accountant, then the entity shall provide such audit in order<\/span> to qualify for the exemption under this section, which audit shall be in lieu of the financial review; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> If the entity filed a federal 990 or 990 EZ tax form, or the successor forms to such forms, with the Internal Revenue Service, then it must provide a copy of such form to the Department<\/span> of Taxation; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> If the entity did not file a federal 990 or 990 EZ tax form, or the successor forms to such forms, with the Internal Revenue Service, then the entity must provide the following information:\n\t\t\t\ta. A list of the Board of Directors or other responsible agents of the entity, composed of at least two individuals, with names and addresses where the individuals physically can be found; and\n\t\t\t\tb. The location where the financial records of the entity are available for public inspection. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> On and after July 1, 2004, in addition to the criteria set forth in subsection D, the Department<\/span> of Taxation shall ask each entity for the total taxable purchases made in the preceding year, unless such records are not available through no fault of the entity. If the records are not available through no fault of the entity, then the entity must provide such information to the Department<\/span> the following year. No information provided pursuant to this subsection (except the failure to provide available information) shall be a basis for the Department<\/span> of Taxation to refuse to exempt an entity. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> Any entity that is determined under subsections C, D, and E by the Department<\/span> of Taxation to be exempt from paying sales and use<\/span> tax shall also be exempt from collecting sales and use<\/span> tax, at its election, if (i) the entity is within the same class of organization of any entity that was exempt from collecting sales and use<\/span> tax on June 30, 2003, or (ii) the entity is organized exclusively to foster, sponsor, and promote physical education, athletic programs, and contests for youths in the Commonwealth<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> The duration of each exemption granted by the Department<\/span> of Taxation shall be no less than five years and no greater than seven years. During the period of such exemption, the failure of an exempt entity to maintain compliance with the applicable criteria set forth in subsection D shall constitute grounds for revocation<\/span> of the exemption by the Department<\/span>. At the end of the period of such exemption, to maintain or renew the exemption, each entity must provide the Department<\/span> of Taxation the same information as required upon initial exemption and meet the same criteria. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> For purposes of this section, the Department<\/span> of Taxation and the Department<\/span> of Agriculture and Consumer Services shall be allowed to share information when necessary to supplement the information required. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nEXEMPTIONS FOR NONPROFIT ENTITIES (\u00a7 58.1-609.11)\n\nA. For purposes of this section, “nonprofit organization” or\n“nonprofit entity” means an entity that meets the requirements of\nsubsection D. “Nonprofit organization” or “nonprofit\nentity” includes a single member limited liability company whose sole\nmember is a nonprofit organization.\n\nB. Any nonprofit organization that holds a valid certificate of exemption from\nthe Department of Taxation, or any nonprofit church that holds a valid\nself-executing certificate of exemption, that exempts it from collecting or\npaying state and local retail sales or use taxes as of June 30, 2003, pursuant\nto § 58.1-609.4, 58.1-609.7, 58.1-609.8, 58.1-609.9, or 58.1-609.10, as\nsuch sections are in effect on June 30, 2003, shall remain exempt from the\ncollection or payment of such taxes under the same terms and conditions as\nprovided under such sections as such sections existed on June 30, 2003, until:\n(i) July 1, 2007, for such entities that were exempt under § 58.1-609.4;\n(ii) July 1, 2008, for such entities that were exempt under § 58.1-609.7;\n(iii) July 1, 2004, for the first one-half of such entities that were exempt\nunder § 58.1-609.8, except churches, which will remain exempt under the\nsame criteria and procedures in effect for churches on June 30, 2003; (iv) July\n1, 2005, for the second one-half of such entities that were exempt under §\n58.1-609.8; and (v) July 1, 2006, for such entities that were exempt under\n§ 58.1-609.9 or under § 58.1-609.10. At the end of the applicable\nperiod of such exemptions, to maintain or renew an exemption for the period of\ntime set forth in subsection G, each entity must follow the procedures set forth\nin subsection C and meet the criteria set forth in subsection D. Provided,\nhowever, that any entity that was exempt from collecting sales and use tax shall\ncontinue to be exempt from such collection, and any entity that was exempt from\npaying sales and use tax for the purchase of services, as of June 30, 2003,\nshall continue to be exempt from such payment, provided that it follows the\nother procedures set forth in subsection C and meets the criteria set forth in\nsubsection D. Provided further, however, that an educational institution doing\nbusiness in the Commonwealth which provides a face-to-face educational\nexperience in American government and was exempt pursuant to subdivision 4 of\n§ 58.1-609.4 from paying sales and use tax for the purchase of services, as\nof June 30, 2003, shall continue to be exempt from such payment, provided that\nit follows the other procedures set forth in subsection C and meets the criteria\nset forth in subsection D.\n\nC. 1. On and after July 1, 2004, in addition to the organizations described in\nsubsection B, and except as restricted in subdivision 2, the tax imposed by this\nchapter or pursuant to the authority granted in \u00a7\u00a7 58.1-605 and 58.1-606 shall\nnot apply to purchases of tangible personal property for use or consumption by\nany nonprofit entity that, pursuant to this section, (i) files an appropriate\napplication with the Department of Taxation, (ii) meets the applicable criteria,\nand (iii) is issued a certificate of exemption from the Department of Taxation\nfor the period of time covered by the certificate.\n\n 2. If the entity that is exempt under this section is exempt from federal\n income tax under § 501(c)(19) of the Internal Revenue Code, or has annual\n gross receipts of less than $5,000 and is organized for at least one of the\n purposes set forth in § 501(c)(19) of the Internal Revenue Code, then the\n exemption under this section for such entity shall not apply to purchases of\n tangible personal property that are used primarily (i) for social and\n recreational activities for members or (ii) for providing insurance benefits\n to members or members’ dependents.\n\nD. To qualify for the exemption under subsection C, a nonprofit entity must meet\nthe applicable criteria under this subsection as follows:\n\n 1. a. The entity is exempt from federal income taxation (i) under §\n 501(c)(3) of the Internal Revenue Code; (ii) under § 501(c)(4) of the\n Internal Revenue Code and is organized for a charitable purpose; or (iii)\n under § 501(c)(19) of the Internal Revenue Code; or\n \t\t\t\tb. The entity has annual gross receipts of less than $5,000, and the\n entity is organized for at least one of the purposes set forth in §\n 501(c)(3) of the Internal Revenue Code, one of the charitable purposes set\n forth in § 501(c)(4) of the Internal Revenue Code, or one of the purposes\n set forth in § 501(c)(19) of the Internal Revenue Code; and\n\n 2. The entity is in compliance with all applicable state solicitation laws\n and, where applicable, provides appropriate verification of such compliance;\n and\n\n 3. The entity’s annual general administrative costs, including salaries\n and fundraising, relative to its annual gross revenue, under generally\n accepted accounting principles, is not greater than 40 percent; and\n\n 4. If the entity’s gross annual revenue was at least $750,000 in the\n previous year, then the entity must provide a financial review performed by an\n independent certified public accountant. However, for any entity with gross\n annual revenue of at least $1.5 million in the previous year, the Department\n may require that the entity provide a financial audit performed by an\n independent certified public accountant. If the Department specifically\n requires an entity with gross annual revenue of at least $1.5 million in the\n previous year to provide a financial audit performed by an independent\n certified public accountant, then the entity shall provide such audit in order\n to qualify for the exemption under this section, which audit shall be in lieu\n of the financial review; and\n\n 5. If the entity filed a federal 990 or 990 EZ tax form, or the successor\n forms to such forms, with the Internal Revenue Service, then it must provide a\n copy of such form to the Department of Taxation; and\n\n 6. If the entity did not file a federal 990 or 990 EZ tax form, or the\n successor forms to such forms, with the Internal Revenue Service, then the\n entity must provide the following information:\n \t\t\t\ta. A list of the Board of Directors or other responsible agents of the\n entity, composed of at least two individuals, with names and addresses where\n the individuals physically can be found; and\n \t\t\t\tb. The location where the financial records of the entity are available\n for public inspection.\n\nE. On and after July 1, 2004, in addition to the criteria set forth in\nsubsection D, the Department of Taxation shall ask each entity for the total\ntaxable purchases made in the preceding year, unless such records are not\navailable through no fault of the entity. If the records are not available\nthrough no fault of the entity, then the entity must provide such information to\nthe Department the following year. No information provided pursuant to this\nsubsection (except the failure to provide available information) shall be a\nbasis for the Department of Taxation to refuse to exempt an entity.\n\nF. Any entity that is determined under subsections C, D, and E by the Department\nof Taxation to be exempt from paying sales and use tax shall also be exempt from\ncollecting sales and use tax, at its election, if (i) the entity is within the\nsame class of organization of any entity that was exempt from collecting sales\nand use tax on June 30, 2003, or (ii) the entity is organized exclusively to\nfoster, sponsor, and promote physical education, athletic programs, and contests\nfor youths in the Commonwealth.\n\nG. The duration of each exemption granted by the Department of Taxation shall be\nno less than five years and no greater than seven years. During the period of\nsuch exemption, the failure of an exempt entity to maintain compliance with the\napplicable criteria set forth in subsection D shall constitute grounds for\nrevocation of the exemption by the Department. At the end of the period of such\nexemption, to maintain or renew the exemption, each entity must provide the\nDepartment of Taxation the same information as required upon initial exemption\nand meet the same criteria.\n\nH. For purposes of this section, the Department of Taxation and the Department\nof Agriculture and Consumer Services shall be allowed to share information when\nnecessary to supplement the information required.\n\nHISTORY: 2003, cc. 757, 758; 2004, cc. 515, 536; 2005, cc. 42, 89; 2007, cc.\n698, 704, 709; 2009, cc. 24, 106, 526; 2016, c. 487; 2019, c. 20; 2024, c. 287.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}