
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, July 30, 1994                   TAG: 9408010038
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: By MELISSA CURTIS STAFF WRITER
DATELINE:                                 LENGTH: Medium

QUIBELL ANGRY AT VA.'S TAX LAW ON DONATIONS

Quibell Corp. won't have to pay sales tax on water donated to last summer's flood victims, but the Roanoke company said Friday the decision still is hard to swallow.

At issue was a $6,000 bill for sales taxes for bottled water donated to victims of the Mississippi River floods.

A week and a half ago, Quibell was told by an auditor in the Virginia Department of Taxation's Roanoke district office that the company was liable for taxes on the 25 truckloads of water the company provided to flood victims. The company donated several loads of water, and more than 20 loads were sold below cost to NationsBank and WSLS-TV, which set up a fund for public donations.

Jeanne Staley, Quibell's director of administration and sales, said she had been told by the auditor that Quibell should have charged sales tax on the water.

On Friday, the Virginia Department of Taxation, which said it could not talk specifically about Quibell's situation, said "at this time the department has no plans to tax any Roanoke business for its involvement in flood relief efforts."

Steven Schwartz, a tax policy analyst with the tax department in Richmond, said the state normally does not tax any company that makes donations from its own inventory, but that under normal circumstances any product a company sells is taxable.

Staley is outraged by the law.

"It makes me mad the state of Virginia wants to take out taxes for money donated for a disaster," she said. "It just doesn't seem right."

Schwartz said companies can file with the state to obtain a tax exemption for charitable causes.

When a disaster happens, Staley said, there is no time for paperwork.

Just this month Quibell sold water to Virginia companies that had collected donations for relief efforts in flood-stricken areas of Georgia, again without charging sales tax.

Schwartz said that in the future companies need to let individuals know that 41/2 percent of every dollar they donate will go toward sales tax.

Staley fears this will drive people away from contributing to relief efforts.

by CNB