Fri 16th January 2009, 11:08am
QUOTE(GlassBeadGame @ Mon 12th January 2009, 8:07am)
California is a bit of of labyrinth on this matter. Here
is a publication from the California State Board of Equalization outlining the treatment of non-profits for sales tax purposes. It is not a blanket exemption. For instance if a non-profit purchases clothing to give to the needy they do not pay sales tax. If they purchase items they consume in the course of business they do pay sales tax.
The Board of Equalization makes the determination of eligibility. One of the items they specifically look at is the IRS Determination Letter.
Letters from the California Franchise Tax Board and the Internal Revenue Service
to verify your organization’s tax-exempt status.
Page 10 of Publication 18 California BOE
...so it is wrong to say that the 501 ( c ) (3) status has no bearing. It is, however, also wrong to say that you can walk into a Office Max in California with your Determination Letter and avoid paying sales tax on equipment. You can get items that directly benefit the needy (and some other specific purposes) without paying sales tax if you document your charitable mission, which includes showing the IRS Determination Letter.
So far what was posted was 2 things - services were taxable and non-for-profits did not, de facto, pay for sales tax. Both, are untrue.
If you enjoy federal non-profit status, it's not a free-pass as far as sales tax goes. You pay sales tax, use tax, federal phone tax, 911 tax on plane tickets, property tax, and mello roos, should one apply.
My point was that asserting that WMF does not pay taxes, by virtue of the fact that they are a 'charity,' which I hold so esteemed with the Mormon church and Scientology is not correct.
You (one individual) may be deemed handicapped, but that doesn't give you the best parking spot, de facto.
I do agree that 503.c can have a bearing on statutory practices. I apologize for implying that federal statutes have no bearing on state mandates. That was not my intent.
Becoming a non-profit does not alleviate one from sales tax. Sales tax is a state and county issue. And as I have
identified myself as a tax professional, you're still going to get my annoying signature. If not, I cannot legally participate in this type of discussion.
I put an email to Wales as to whether he does, in fact, pay sales tax. I'm not a troll here, just trying to clear up some misconceptions: You may be not for profit, but that is an income-derivation. It does not automatically entitle that entity to anything else.