Effective April 22, 2016, dealers are no longer required to collect sales and use tax on prepared meals, catering, and labor related to preparing and serving food purchased by nonprofit organizations, churches, state agencies, and local governments that have Virginia sales tax exemption certificates and meet certain requirements.
In order for the purchases to qualify for the exemption, the nonprofit organization, church, or government entity must demonstrate all of the following:
- The provision of prepared meals, catering, and related services supports a function, mission, service, or purpose of the organization.
- The charge for prepared meals, catering, and services is billed to and paid for by the organization claiming the sales tax exemption.
- The organization that claims the exemption controls when, how, and who consumes the prepared food or catered meals.
The Department of Taxation is not issuing new nonprofit exemption certificates at this time. New certificates will be issued when organizations renew their sales tax exemption. Instead, the department is sending letters explaining this policy change to all organizations holding department-issued nonprofit exemption certificates.
Organizations should provide the letter along with their exemption certificate when purchasing prepared meals, catering, or related services from dealers.
For more information, see Tax Bulletin 16-3 “Important Information Regarding Meals and Catering Purchased by Nonprofit Organizations, Churches, and Governmental Entities” on the department’s website. If you have questions, please call our Customer Contact Center at (804) 367-8037 or our Nonprofit Exemption Unit at (804) 371-4023.