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D.C. Municipal Regulations (Last Updated: September 13, 2017) |
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Title 9. TAXATION AND ASSESSMENTS |
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Chapter 9-4. SALES AND USE TAXES |
Section 9-418. USE OF CERTIFICATES OF EXEMPTION BY SEMIPUBLIC INSTITUTIONS
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418.1Tangible personal property purchased and paid for by a semipublic institution which has obtained a certificate of exemption is exempt from the District sales and use tax if the property is for use and consumption in maintaining, operating, and conducting the activities of the institution.
418.2The right to exemption does not apply in any of the following circumstances:
(a) If the property is not paid for by the institution;
(b) If the property is not for use or consumption in the maintenance, operation, and conduct of the activities of the institution; and
(c) If the property is to be given to the institution's members or employees in place of salaries, wages, or compensation.
(d) If the property is used for carrying on an 'unrelated trade or business' as that term is defined in § 513 of the Internal Revenue Code of 1954; or
(e) If the property is purchased by the organization for the personal use of officials, members or employees of the institution, except as otherwise provided by law.
418.3The certificate and the exemption number on the certificate shall not be used by any other person or organization to make purchases for or on their behalf or for the purpose of making a donation to the institution.
418.4A semipublic institution regularly engaged in making sales at retail is required to report and pay to the District the tax on those sales and collect reimbursement for the tax from purchasers.
418.5A certificate of exemption shall not be used by an institution to make purchases of property for resale.
418.6Purchases for resale shall be made by using certificates of resale which enables the institution to make the purchases without payment of the tax to the supplier.
418.7To be entitled to use certificates of resale, an institution shall first file an application for certificate of registration.
418.8Failure on the part of a semipublic institution to exercise care in the use of its exemption certificate may result in revocation of the certificate.
The following are examples of purchases of property or services which are not purchases of property or services for use or consumption in the operation, maintenance, and conduct of semipublic institutions, whether paid for directly from the funds of semipublic institutions (or other person) is required to pay the tax on the sale in the same manner as any other person:
(a) Purchases of property or services by or for a clergyman or member of a religious order for personal use, for consumption in his or her individual capacity, and not on behalf of a semipublic institution are not sales to semipublic institutions; and
(b) Any purchase of property or services for which the organization is reimbursed by an official, member or employee of such organization.
418.9In the event that the exempt organizations make purchases of property or services as described in this section without payment of the tax, such organizations shall be directly liable to the District for payment of the tax.