Empower Your Non-Profit Organization with Sales Automation Services for Non-Profit Organizations

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It's well known that nonprofits are exempt from federal and state income taxes. Frequently they're also exempt from local and state property taxes. However there is one tax exemption that nonprofits find elusive, and that's state sales tax exemptions. Hello, my name is Ron Barrett and I'm the VP of Nonprofit Services here at COGENCY GLOBAL. In most states, the key to a sales tax exemption for a non-profit is IRS 501(c)(3) status. These charities qualify for sales tax exemptions in many states, but not all. And even if they do qualify for a sales tax exemption, a state's threshold for applying for and obtaining a sales tax exemption may actually be higher than the standard for obtaining a tax exemption from the IRS. One such state is Pennsylvania. They have five specific criteria that a 501(c)(3) organization needs to meet. Two of them are relatively easy but three are rather difficult. They need to provide narratives, statistics and quantifiably demonstrate that they meet the requirements for a sales tax exemption in Pennsylvania. And because of this, sales tax exemption applications are frequently rejected in that state, unfortunately. But there is good news for nonprofits, namely that in most states it's a simple application--whether it be on paper or online--along with some supporting documents like the Articles of Incorporation, IRS determination letter, bylaws, etc., and sometimes financial statements or a 990. So where and when does a nonprofit need to register for a sales tax exemption? Well, you certainly want to do it in your home state, if one is available, and the same is true for neighboring states if they offer a sales tax exemption. But if you have employees that are travelling to other states, you may also want to consider looking into those states about three to six months in advance because it does take the states some time to approve a sales tax exemption application. Thanks for listening today and please check on our blog, or visit our website for more information.