As of April 22, 2016, there are new sales tax exemptions for nonprofits. Now, collecting sales tax on catering, prepared meals, and labor is not required for qualifying nonprofits, churches, and state and local governments that hold Virginia sales tax exemption certificates.
In order to utilize the new exemption, organizations must meet the all of the following qualifications:
- The catering, prepared meals and/or related services support the purpose or mission of the organization.
- The organization pays for the catering, prepared meals and/or services.
- The organization is in control of who, when, and how the catering or prepared meals are consumed.
If your organization currently holds a sales tax exemption, you should receive a letter explaining the policy from the department if you currently hold a nonprofit exemption certificate. Remember to provide the letter and your exemption certificate to catering and prepared meal providers when making a purchase. Please see this VA Department of Taxation article for more details, and contact us for any questions.