NONPROFIT QUICKTIPSSM
An electronic publication of Pfau Englund Nonprofit Law, P.C.
Disclaimer: This publication is designed to provide accurate information in regard to the subject matter covered. However, it is not intended to provide legal or other professional advice. If legal advice is required, the services of a competent professional should be sought.
What about Sales Tax?
Recognition of tax exempt status by the Internal Revenue Service (IRS) makes organizations exempt from paying federal income tax on net revenues. It does not make organizations exempt from paying other taxes such state sales taxes on items your group purchases or sells.
Many, but not all, states provide sales tax exemption for groups tax-exempt under section 501(c)(3) of the Internal Revenue Code. Some states make applying for exemption simple with an on-line process on the state's Web site. Others require significantly more paperwork, including supplying a copy of the IRS exemption letter and/or application.
To determine if your state provides sales tax exemption and if your organization is eligible, you must research your state's laws and requirements. A good place to start is the Web site for your state's taxing agency. Links to state taxing agencies are available from:
Alternately, we will be happy to research your state's requirements for you and assist you to apply for sales tax exemption.
Nonprofit QuickTipsSM is a periodic electronic publication of Pfau Englund Nonprofit Law, P.C. It is intended to provide nonprofit executives with useful, quick legal tips. If you have a topic you would like covered in this publication, or know someone who would like to be added to our e-mail list, please contact the firm.