It’s no surprise to pay sales tax when buying goods at stores. But what happens when a nonprofit organization sells goods, through a website, at periodic conferences, or as part of its program activities? Must the nonprofit collect sales tax too on its sales of T-shirts, books, or other items made available to others, just like a store? Aren’t nonprofits exempt from taxes? If a nonprofit’s sales are not exempt, under which state sales tax law will it owe sales tax?
By Guest Author Sherry Quam Taylor
Every nonprofit needs more money, right? I walk into most meetings on the premise of teaching organizations to raise more money. But soon the conversation turns to the annual, quarterly, and monthly rhythms of structure and processes that may or may not be in place. Often many of these core and supporting practices are quickly brushed over.
What do Donald Trump and Hillary Clinton share in common? Among so many things political and otherwise (go ahead, use your imagination), they both head up charitable foundations, which have recently received media scrutiny for apparently operating outside legal boundaries. What are the problems? More importantly for us regular folks, what can prudent and responsible nonprofit leaders learn from these examples? We will focus here on several areas related to:
- State charitable regulation requirements,
- Tax exemption principles against private benefit for nonprofit insiders, and
- IRS requirements for staying on course with an organization’s tax-exempt purpose.