ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Wednesday, April 2, 1997 TAG: 9704020014
SECTION: EDITORIAL PAGE: A-8 EDITION: METRO
SOURCE: GLENN ROSE
YOUR MARCH 17 news article (``Softball as tax-exempt holy mission'') reported on the plight of Howard Semones of Spartan Screen Printing in Salem. The Virginia Department of Taxation is requiring him to pay sales tax on merchandise he sold to churches over the past 21 years. This merchandise was apparently sold under the belief that the ST-13A sales-tax exemption form for churches rendered them exempt from the sales tax. The Department of Taxation has disallowed all the ST-13A forms he had collected and kept.
The ST-13A form states: "The Virginia Retail Sales and Use Tax Act provides that the sales and use tax shall not apply to: 1. Tangible personal property taxation under Section 501(c)(3) of the Internal Revenue Code or whose real property is exempt from local taxation pursuant to the provisions of Section 58.1-3606, for use (a) in religious worship services by a congregation or church membership while meeting together in a single location, and (b) in libraries, offices, meeting or counseling rooms or other rooms in the public church buildings used in carrying out the work of the church and its related ministries ...''
The form is signed under the provision that the ``undersigned, for and on behalf of the nonprofit church, certifies that all tangible personal property purchased under this exemption certificate is for the purposes indicated above, unless specified on each order, and that the purchase will be paid for out of church funds," and the signer is ``authorized to sign this [and] it is true and correct, made in good faith, pursuant to the Virginia Retail Sales and Use Tax Act."
The only instructions to the business on the form are that the ``supplier is required to have on file only one Certificate of Exemption properly executed by each nonprofit church buying tangible personal property tax exempt under this certificate.''
Virginia Sales and Use Tax regulations, dated Jan. 1, 1979, say, ``The burden of proving that the tax does not apply rests with the dealer," i.e., the business or supplier, ``unless he takes, in good faith from the purchaser or lessee, a certificate of exemption indicating that the property is exempt under the law.''
It is more than implication that indicates it is up to the church to substantiate the appropriateness and legality of the exemption if ever questioned by the state. In Semones' case, the tax department says it's up to the business to verify that appropriateness, and in a sense, act as an agent for the department in deciding whether the exemption should be granted and whether the church is using the purchase ``in religious worship services" in ``its related ministries."
I'm not questioning the granting of tax exemptions to churches. The whole basis for such exemptions is based on the Jeffersonian belief in government not interfering in religious practices. It's sound reasoning rooted in our democratic traditions.
But once a church presents a business with the ST-13A form, properly filled in, the business needs to butt out. The business isn't required to check the legality of that claim. Why is Virginia expecting the business to rule on whether the church's purchase filled the rather broad criteria defined on the form? Does Virginia really intend to give to individual businesses that power?
Suppose a religion that a business is ignorant of or hostile to seeks to purchase goods and services from that business. Does that business have the responsibility and power to rule on whether that religion fulfills the requirement of the law and pays another 4.5 percent or not? What are the avenues of appeal for that religion, given such a ``ruling''?
Both federal and state governments tread very gently when they are on this turf. Do we really want to give a business that type of authority? By interpreting and applying this statute to Semones, as the state's tax department is doing, it's creating a very dangerous, intrusive situation. The amount of abuse this can lead to is staggering.
Churches should either be exempt from sales and use taxes or not. There should be no middle ground. Allowing the state to rule on what is an appropriate religious service cuts right through the basic tenets of Virginia and the United States. Expecting businesses to make such a decision is a conveyance of a power we don't even give our elected government.
GLENN ROSE of Lexington owns James River Basin Canoe Livery.
LENGTH: Medium: 80 linesby CNB