Retail Tax Exemptions

[Whitlock342]

I need some info on who is responsible for the Tax ID# required for retail tax exemptions, Council or the Chartered Organization? Often it is asked for from retailers with fundraising or outing expenses. Thanks, SM342

[ljnrsu]

Your Charter Organization is responsible for the tax exempt ID# that you would use. The reason being is that for all tax reporting purposes your unit is considered a subsidiary of the Charter Organization.

 

Hope this helps you.

[FScouter]

Except for a government entity, I don't believe any org is exempt from sales tax.

[SemperParatus]

Most states have sales tax exemptions for goods purchased by non-profit organizatons. Fscouter's state may not, but the overwhelming majority of states do. What state are you in?

 

ljnrsu gave you the right answer to your question.

 

 

[ljnrsu]

Was interrupted and I left out something important in my original post. Your Charter Organization must be a tax exempt organization and hold an sales tax exempt certificate issued by your state.

 

Sales tax exempt status varies via state. Most states have automatic exemptions for churches/synagogues.

 

FScouter for your state that could be very true. I am not well versed in every states sales tax laws as my tax accounting practice is limited to NJ and NY entities. Which is why I said to check with the Charter Organization as to their status.

 

 

[ScoutNut]

If what you are inquiring about is sales tax exemptions, depending on your state, you should be able to get a copy of the sales tax exemtion letter from your local council. You would then show the letter when making purchases for your unit & would not have to pay state sales tax.

 

If you are talking about a tax ID number for reporting donations on your income tax form, that would come from your Charter Organization.

[nldscout]

You have to go to your state Tax people.

 

We were just told in NY to use the councils Tax exempt number which they furnished to troops and packs.

[fgoodwin]

I'm not a tax expert, but I think ljnrsu answered a different question than Whitlock342 asked.

 

Whitlock342, any entity, including a Pack or Troop, can get a tax ID#; just go to www.irs.gov and you can apply for one online. You don't need to be tax-exempt in order to get a tax ID#.

 

On the other hand, depending on your state's requirements, you may not need a tax ID# in order to be exempted from state and local sales taxes, if that's your real question. As others ahve said, the application of sales taxes is subject to state law, and states vary in which entities they will exempt from those taxes.

 

In Texas, you don't have to be a 501©(3) non-profit entity in order to qualify for a sales tax exemption. Here, it is up to the unit to fill-out the Sales & Use Tax Exemption Form. The form doesn't even require a tax ID#. The Texas exemption form is submitted to the retailer who can accept or reject it. A footnote on the form indicates there is no such thing as a "tax exempt number" in Texas.

 

If you are chartered to a church, and they allow you to use their tax ID#, that only means the IRS agrees that your unit, as part of the church, is not subject to income taxes. It has nothing to do with whether or not local sales taxes apply to your purchases -- again, that's up to your state's requirements.

 

If I am mistaken, I'm sure one of the many lawyers or accountants will correct me.

 

YiS,

 

Fred Goodwin

[Whitlock342]

Thanks for the response, this started when the wreath vendor added a "resale certificate" provision into their aggreement here in Washington State. This form has the buyer's tax registration number needed. The Council feels the tax number should come from the Charter Organization, non profit or not. Why can't the Boy Scout council's support the retail tax exemption for Packs or Troops? Looks like we need to file on our own, just like our Council or National does.

[Beavah]

Yah, you need to talk to someone in Washington State, eh? Too many differences across state lines on how this is handled. But what you're describing is different than what anybody has answered yet.

 

Your wreath vendor is lookin' for some proof that you're a corporate entity/reseller, rather than the end purchaser of the wreaths. In other words, he wants to act as wholesaler, so he doesn't have to charge you sales tax because you're a retailer.

 

As a retailer, it's then up to you to collect sales tax on wreaths you sell, or determine if there's an exemption from the obligation to collect sales tax in your state if you are doing a one-shot fundraiser (in other words, no longer his problem once he establishes that you are the retailer).

 

In this relationship, a typical state sales tax exemption for purchases (as a NFP, church, etc.) is not goin' to apply, the way it would if you were buyin' tents. You aren't making a retail purchase of wreathes; you are buying wholesale, then acting as a vendor.

 

[oldsm]

Of course, if you sell Trails End Popcorn, your council will have taken care of all that paperwork for you. All you have to do is sell and reap your 30%+ profit...

[John-in-KC]

I agree with Beavah. This is something which you need your Council's Executive Board accountant or attorney to give advice on. Hopefully, the Professional Staff already has these fact sheets on the shelf. What is correct procedure for you in Washington State won't hold water in Missouri.

 

We had a huge conundrum last spring. Our Council lets Supply Corporation lease space for a National Scout Store. Council got a letter from State Department of Revenue which said "Tax Exemptions for the Licensing Body may NOT be used by derivative bodies (ie Boy Scout and GSUSA units).

 

Our neighboring Council, which runs its own Scout Shop, and which has its own tax exempt ID, did not get one of these.

 

While Council, the State General Assembly (yes, our Executive Board got area legislators (who in many cases are also Scouters) into the act), and the State Department of Revenue went through the Kabuki Theater of "who is entitled," as a COR, I gave a simple instruction to the units under Charter: Go to the neighboring Council Service Center and use their Scout Shop.

 

Ironically, for us the neighboring Council shop is closer than our own Service Center!