Organizational Tax

This page expands upon Sales, City, Meals, and Local taxes, Unrelated Business Income, Fellowships, and Scholarship taxes. Below you will find copies of VCU's state sales tax exemption certificates for Virginia and other states.

Sales, Meals, City and Local Tax

VCU is a political subdivision of the Commonwealth of Virginia. As such, VCU is exempt from paying sales tax on tangible personal property for use or consumption by the State. 

Purchases made in the State of Virginia to a vendor should be accompanied by a copy of our Virginia state sales and use tax exemption certificate.

These purchases include:

• Tangible personal property
• Prepared meals
• Catering and other services related to the provision of food.

Certificates and instructions for states outside of Virginia:

• State of Florida: provide a copy of the Florida Consumer's Certificate of Exemption to the selling dealer to make tax exempt purchases or leases in Florida. Payment for the purchase must be made with the governmental entity’s funds. When payment is made with the personal funds of an authorized representative, the purchase is subject to tax, even if the representative is subsequently reimbursed with the governmental entity's funds.
  This provision does not apply to authorized employees of a federal agency.
  The following are exempt:
  • Purchases and leases of items or services directly by the governmental entity.
    
    
• State of Kentucky: provide a copy of the Kentucky Out of State Purchase Exemption Certificate. All purchases of accommodations, meals, materials, and equipment are eligible for exemption.
  
  
• State of Mississippi: provide a copy of the Mississippi Letter Ruling of Exemption Status. Exemptions permitted are embedded in the letter.
  
  
• State of Ohio: provide a copy of the Ohio state sales use and tax exemption certificate.
  
  
• State of Rhode Island: provide a copy of the Rhode Island state sales and use tax exemption certificate.
  
  

Unrelated Business Income Tax

As an exempt organization, there are instances where VCU may be liable for tax on income that is considered unrelated. The definition of unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of VCU’s exemption. Per the IRS, an exempt organization that has $1,000 or more of gross income from an unrelated business must file a Form 990-T PDF and must pay estimated tax if it expects its taxes for the year to be $500 or more.

Scholarship Tax Information

Scholarships constitute taxable income unless they are ‘qualified scholarships.’

• Qualified Scholarships — Defined as payments that are given to the recipient who is a candidate for a degree that is made for the purpose of studying or conducting research at an educational institution. Payments include tuition and fees required for enrollment or attendance at the educational institution, and fees, books, supplies or equipment ‘required for courses of instruction’ at the institution.
  
  
• Non-Qualified Scholarships — Any payments that are not qualified scholarships. 
  Examples include cash stipends used to pay rent, buy food, or pay for other personal items