Two organizations are having a joint charity fundraiser and utilizing small
businesses as vendors. One organization is a 501(c)(3) and sales tax exempt
organization and the other is neither.
Question 1: When purchasing for the charity event from a small business does
the check when paying for goods have to come from the sales tax exempt
organization in order for them to pay no sales tax?
Question: Is there a legal way to receipt the transaction to say this is for
the organization with the sales tax exempt status but the other organization
is paying by check on their behalf?
The small business has all sales tax exempt paperwork on file.
Just trying to figure out if the transaction is between the organization
that's putting up the check and the small business - OR - if who puts up the
check has no real relevance to the transaction.
*In Nevada*
Contact your state tax commission or revenue department. You may also find
the information on their website. In my state, non-profits must pay sales tax
in some instances and vendors who sell at an event, including those hosted by
non-profits, must collect and pay sales tax. Usually, the non-profit makes
their money by receiving a percentage of the profits made by the individual
vendors. Unless the non-profit is also selling items, a check you write to
them would be considered a donation, not payment for a purchase.
JGabriel | Community Moderator |
1/25/2013 - 4:50 pm
Try getting in touch with a local Small Business Development Center or SCORE, two of SBA's resource partners. They're located across the country and provide free business counseling and answers. Visit our local assistance guide to find your local SBA resource partners by entering your zip code.
BizResearcher | Window Shopper | 1/29/2013 - 1:52 pm
the information on their website. In my state, non-profits must pay sales tax
in some instances and vendors who sell at an event, including those hosted by
non-profits, must collect and pay sales tax. Usually, the non-profit makes
their money by receiving a percentage of the profits made by the individual
vendors. Unless the non-profit is also selling items, a check you write to
them would be considered a donation, not payment for a purchase.
JGabriel | Community Moderator | 1/25/2013 - 4:50 pm
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