Section 9-417. CERTIFICATES OF EXEMPTION

 

417.1The Act presumes that all receipts from the sale of tangible personal property or services subject to sales and use tax are from taxable sales at retail and are subject to the tax. The contrary shall be established by the vendor or purchaser.

 

417.2If the purchaser is the United States, the District of Columbia, or any instrumentality of either, the vendor must show on the record of sale the instrumentality or agency to which the sale was made, the amount of the sale, and date of the sale.

 

417.3A semipublic institution purchasing property at retail for its own maintenance and operation must obtain from the Deputy Chief Financial Officer a certificate of exemption stating that the institution is entitled to the exemption. If the semipublic institution does not present the certificate of exemption to the vendor, the vendor must collect the reimbursement for the tax.

 

417.4If a vendor makes sales to a semipublic institution, the vendor must keep a record of the number of the certificate of exemption, the name of the purchaser, the date of each sale, and the amount of the sale.

 

417.5If a purchaser of tangible personal property is a member of a foreign diplomatic corps and personally presents an identification card issued to that purchaser by the State Department, exempting the person from excise taxes, the card shall be authority for the vendor not to add reimbursement for the sales tax to the sales price of the property; Provided, that the vendor must show on the record of each sale the name of the purchaser, the date of sale, the amount of the sale, and the State Department identification card number.

 

417.6In order to comply with the provisions of § 128(c) of the Act, as amended by the District of Columbia Tax Enforcement Act of 1982 (D.C. Law 4-131; effective July 24, 1982), all organizations exempt from taxes as of the effective date of D.C. Law 4-131 shall be required to reapply for exemption.

 

417.7Exemption certificates issued under the Act and regulations prior to the effective date of D.C. Law 4-131 shall not be accepted for sales made after December 31, 1982.

 

417.8The tax shall be collected on sales to entities claiming exempt status on or after January 1, 1983 unless the vendor is presented with an exemption certificate issued under § 128(c) of the Act, as amended, and this chapter.

 

417.9The requirement in the Act that activities be carried on to a substantial extent within the District refers to location, operation (solicitation of funds) and administrative functions within the District.

 

417.10The following activities shall be considered to determine whether an institution is dispensing substantial benefits within the District:

 

(a) Dispensing of direct benefits, including but not limited to grants, scholarships, and other forms of direct assistance conferred upon residents of the District;

 

(b) Expenditures within the District in connection with scientific and research studies, conferences, seminars, and similar activities if such activities result in identifiable benefits to District residents; or

(c) Expenditures for payroll, rent, services, and supplies incurred in the District in order to provide the benefits for which the institution was formed; Provided, that such expenditures shall be considered only if it can clearly be shown that they result in direct benefits to resident individuals or businesses. Expenditures (such as payments for social functions, lobbying) not incurred to produce benefits shall not be considered.

 

417.11The aggregate benefits referred to in §§ 417.10(a), (b), and (c) shall equal or exceed the following percentages of similar benefits dispensed and expenditures incurred everywhere the institution conducts its activities:

 

(a) Five percent (5%), if the institution is national in scope (activities extend to a majority of the States); or

 

(b) Twenty-five percent (25%), if the institution is not national in scope (activities extend to less than a majority of the States).

 

417.12The location requirement of § 128(c) of the Act is not satisfied by a mere statutory office of a registered agent, but refers to a physical location where the activities of the organization are regularly carried on.

 

source

Commissioners' Order 54-1415, 1 DCR 4 (July 19, 1954); as amended by Final Rulemaking published at 30 DCR 1922, 1926 (April 29, 1983); by Final Rulemaking published at 30 DCR 3263, 3264 (July 1, 1983); by Final Rulemaking published at 32 DCR 1354, 1359 (March 8, 1985); and by Final Rulemaking published at 36 DCR 8057, 8058 (November 24, 1989).