Sales Tax

Georgia has indefinitely extended sales and use tax exemptions for nonprofit volunteer health clinics, nonprofit health centers and qualified food banks. Read this article to learn more about applying for sales and use tax exemption letters of authorization.

[pdf-embedder url="https://pbpatl.org/wp-content/uploads/2020/08/Sales-Tax-Exemptions-Extended-Indefinitely-for-Certain-Nonprofits.pdf" title="Sales Tax Exemptions Extended Indefinitely for Certain Nonprofits"]

 

In Georgia, most §501(c)(3) tax-exempt organizations ARE NOT exempt from paying sales and use tax in Georgia. The Georgia Department of Revenue (GA DOR) realized that many tax-exempt organizations are not aware of their sales tax obligations especially regarding their fundraising activities. So, on July 2, 2020, the GA DOR issued a comprehensive bulletin on how and when sales and use tax applies to nonprofit fundraising activities. The bulletin explains 13 different fundraising scenarios and their sales tax implications. For instance, does your nonprofit have to collect sales tax on the sale of an auction item donated to your organization? What if you host a road race and charge an admission fee to raise funds? Should sale tax be charged on golf tournament entry fees or mulligans? Those and many more questions are answered in this bulletin.

The Georgia Department of Revenue issued two notices on March 1, 2019 updating its previous policy bulletins regarding sales tax exemptions involving certain 501(c)(3) organizations. These notices update Policy Bulletins SUT-2017-04 (PDF) and SUT-2017-02 (PDF).

Nonprofit organizations that hold fundraisers or sell merchandise must be cognizant of sales tax collection obligations. Many nonprofit organizations think that they are not obligated to collect sales tax. Perhaps they believe that they are not required to collect tax because they do not routinely sell products or tickets. Some organizations think that their exemption from federal income tax extends to sales tax. But nonprofit organizations, with a few exceptions, are required to collect sales tax (and required to pay sales tax on purchases). This article provides guidance to nonprofits on their sales tax obligations regarding gala ticket and silent auction sales. [pdf-embedder url="https://pbpatl.org/wp-content/uploads/2018/10/Article-Georgia-Sales-Tax-Obligations.pdf" title="Article- Georgia Sales Tax Obligations"]

Unlike many other states, the State of Georgia does not grant a blanket exemption from sales and use tax to Section 501(c)(3) tax-exempt organizations. In order to be exempt from paying tax on goods that are purchased or sold by the organization, the organization or the transaction must fit one of the specific, narrow exceptions laid out in the Georgia Code and the organization must obtain an exemption determination letter from the Georgia Department of Revenue. Paying Sales and Use Tax [pdf-embedder url="https://pbpatl.org/wp-content/uploads/2016/06/UPDATED-PAYING-SALES-AND-USE-TAX-IN-GEORGIA.pdf" title="Article: Updated-Paying Sales and Use Tax in Georgia"]

Unlike some states, Georgia does not provide a general exemption from the payment of state sales and use tax for nonprofit organizations. To be exempt from Georgia state sales and use tax, a nonprofit must fit into a specific exemption category. This article describes some of the exemptions that may apply to nonprofit organizations. [pdf-embedder url="https://pbpatl.org/wp-content/uploads/2016/06/UPDATED-GEORGIA-SALES-AND-USE-TAX-EXEMPTIONS-FOR-NONPROFITS.pdf" title="Article: Updated-Georgia Sales and Use Tax Exemptions for Nonprofits"]