It is well known that most nonprofits are exempt from federal and state income tax. They are also frequently exempt from real property tax, but one tax exemption that even nonprofits sometimes find elusive is “sales and use” tax.
With sales tax rates approaching 10% in some jurisdictions that combine state and local sales taxes, it’s an important exemption not to overlook. However, some nonprofits fail to take advantage of these exemptions because of the complexity of determining in which states an exemption exists and because of the lack of uniformity from state to state.
Though several states provide a variety of sales tax exemptions to various industries and organizations, most only make an exception for certain groups or types of nonprofits. In the majority of states the key to a sales tax exemption is the designation as a charitable, 501(c)3 nonprofit organization. For the other types of tax-exempt nonprofits, a state sales tax exemption is much less certain, and requires a careful reading of each state’s tax code and regulations.
Even with a 501(c)3 designation, charitable nonprofits in some states are still not exempt from sales taxes and, even if they are, procedural requirements must be strictly followed to actually receive a sales-tax exemption. This is true in nearly all states that offer an exemption from sales tax to nonprofit organizations.
This program will give you a broad overview of sales tax exemptions available to nonprofits; clarify how to obtain, manage and maintain these exemptions, and provide valuable reference information.
Takeaways:
- State-by-state sales tax exemptions available to nonprofits
- Sales tax exemption filing procedures and required attachments
- Compliance requirements to maintain sales tax exemption
- Required procedures to ensure sales tax exemption
- Difficult states and special exceptions
- Efforts to simplify the process
 Ron Barrett is the Vice President of Nonprofit Services at National Corporate Research, Ltd., (“NCR”), a professional registered agent company that provides nationwide corporate, secured transaction, business license, real property, court, agency, library and nonprofit services. His responsibilities at NCR have included management of client service specialists and operational staff working with various state and federal agencies as well as product development. He joined NCR in 2008 when Capitol District Information (“CDI”), a provider of legal research, document retrieval and library services in Washington, D.C., was acquired by NCR.
Mr. Barrett has a wealth of knowledge and experience working with nonprofits, state charities regulators and state sales tax exemption filing offices. He developed a comprehensive suite of nonprofit services that NCR currently provides to legal and business entity clients. These services include corporate filings, charitable solicitation registrations, compliance and sales tax exemption management. He has presented public and in-house CLE seminars on this topic around the country. |
 Established in 1980, National Corporate Research, Ltd. (NCR) is a professional registered agent company that provides nationwide corporate, secured transactions, business license, real property, court, agency, library and nonprofit services. We are qualified to act as registered agent in all 50 states and the District of Columbia and provide statutory representation services for tens of thousands of companies across the country.
With full service offices in key cities from coast to coast and experienced staff dedicated to providing responsive, accurate, cost-effective service, NCR has the resources and expertise to handle your multi-state registration and compliance needs while providing the kind of personalized service usually only found in smaller service providers. |
