SALT Report 2362 – The Georgia Department of Revenue issued a bulletin that discuss the application of sales and use taxes to purchases and sales made by nonprofit organizations for fundraising purposes. The bulletin also provides guidance to dealers of tangible personal property who make fundraising-related sales to nonprofit organizations.
Generally, Georgia law does not provide an exemption for purchases made by nonprofit organizations, such as churches, parent teacher organizations, charitable organizations, and civic organizations. Therefore, these organizations must pay tax on all purchases of tangible personal property made for the organization’s personal use. For example, if a church purchases office supplies for use by the church, they owe sales and use tax on the purchase price of the office supplies.
If a nonprofit organization sells tangible personal property at retail, they must comply with all state laws related to the collection and remittance of sales tax. For example, nonprofit organizations are required to charge sales tax at the rate in effect where the customer takes receipt of the item and remit that tax to the State.
If a nonprofit is given tangible personal property by a donor, the nonprofit does not owe any sales or use tax on the donated property. However, if the nonprofit subsequently sells the donated property, the nonprofit must collect tax on that sale and remit it to the state.
If a nonprofit gives tangible personal property in appreciation of a donation given to the organization, the nonprofit is considered the end user of the tangible personal property given as a gift and is liable for sales and use tax on the purchase price or cost price of the gift.
Churches are not required to collect tax on their fundraising sales if they make sales for less than 30 days in a calendar year. However, the funds raised from these sales must be used to further fund programs that provide relief to the aged, or that provide church related youth activities, religious instruction and worship, or to construct or repair church facilities.
- Taxes collected by an unregistered nonprofit can be remitted by using Form FS-32 Miscellaneous Event, and
- Taxes collected by a registered nonprofit can be remitted by using Form ST-3 Sales and Use Tax Return
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