Reimbursement of Expenses - to reimburse sales tax or not?

Does the Church have a policy or guidelines on whether to reimburse sales tax or any other tax ( food, etc. ) for approved expenses? I am clerk of a YSA branch and we get receipts for approved expenses frequently, normally for food purchased for an activity and the like. We have in the past reimbursed the full amount, including any sales tax or other tax that was charged. Just curious if this is correct or not?

Thanks


Doug

dukie4lif wrote:Does the Church have a policy or guidelines on whether to reimburse sales tax or any other tax ( food, etc. ) for approved expenses? I am clerk of a YSA branch and we get receipts for approved expenses frequently, normally for food purchased for an activity and the like. We have in the past reimbursed the full amount, including any sales tax or other tax that was charged. Just curious if this is correct or not?

The policy is that you always reimburse the full amount the member actually paid. In some specific areas (Utah, North Carolina, and Canada for certain, and perhaps others), there are specific procedures for charging all or part of the sales tax paid to certain subcategories that are automatically reimbursed.

See the wiki article Sales tax for more details.

Our policy has always been to reimburse the amount paid that the member asks for.

Some members have expressed a desire to pay the sales tax portion of amount to
simplify their own record-keeping especially when they don't have a seperate receipt
for church purchases (i.e. they buy refreshments for a youth night with the rest of
their groceries, highlight what was bought for the church, but don't want to calculate how
much tax was incurred for just those items.)

Some feel it is a way for them to fullfill certain promises made to impart a portion of
their material substance to God's work.

Others feel it an obligation they are willing to pay rather than going through the
hassle of giving the vendor the sales-tax exemption waiver our state uses, waiting for
a manager to come by and show the checker how to process the form, and that sort
of thing. They see it as a convenience fee they are glad to pay to avoid delay.

I would very much like to see the official policy in print that says we should pay
more to the member who does not want it.

atticusewig wrote:Our policy has always been to reimburse the amount paid that the member asks for.

That's interesting, but I don't see how the member's choice is particularly relevant.

atticusewig wrote:Some members have expressed a desire to pay the sales tax portion of amount to
simplify their own record-keeping especially when they don't have a seperate receipt
for church purchases (i.e. they buy refreshments for a youth night with the rest of
their groceries, highlight what was bought for the church, but don't want to calculate how
much tax was incurred for just those items.)

As a financial clerk, I am happy to do the work of calculating the correct sales tax, even for receipts that are split between personal and church purchases (I prefer it when people separate the receipts, but it's not that big of a deal for me to do the calculation). My experience is that when people try to calculate it themselves, they are wrong more than half the time anyway.

atticusewig wrote:Some feel it is a way for them to fullfill certain promises made to impart a portion of
their material substance to God's work.

That is a kind thought, but is not relevant in this context, in my opinion.

atticusewig wrote:Others feel it an obligation they are willing to pay rather than going through the
hassle of giving the vendor the sales-tax exemption waiver our state uses, waiting for
a manager to come by and show the checker how to process the form, and that sort
of thing. They see it as a convenience fee they are glad to pay to avoid delay.

I can understand that, and wouldn't argue against it.

atticusewig wrote:I would very much like to see the official policy in print that says we should pay
more to the member who does not want it.

That's very simple. Handbook 2, Section 13.2.8:

Stake and ward budget funds should be used to pay for all activities, programs, and supplies. Members should not pay fees to participate. Nor should they provide materials, supplies, rental or admission fees, or long-distance transportation at their own expense.

That makes it very clear that members are not supposed to pay for anything at their own expense. There is no mention of "what they want" or "what they ask for." As soon as you open that door, a member who is misguidedly saying they are consecrating their material goods to the Church can pay for thousands of dollars of expenses related to activities. We reimburse their actual expenses -- all of them.

Off course you're right, but the handbook omits wording like "taxes and service fees"
which would easily clear everything up for most of us. When we have financial training
I always hear about how we need to treat the funds as sacred, so I have bit of difficulty
when expenses are incurred that can be avoided. But I guess it is much better to accept
a little extra cost if it makes the policy more precise.

While I've never run into it, I've heard people joke about buying things for something Church-related and then, rather than submitting expenses (or only submitting some of the expenses), they tease about deducting the amount from their tithing, etc. The math may SEEM to work out properly for everybody involved, but it goes against principles and, as aebrown pointed out, policy. Following various policies makes this much simpler/neater/better. Pay your 1/10 of increase, let the Church leaders authorize and reimburse necessary expenses for the full amount on the receipt.

aebrown is a nice guy; our Stake does not allow "mixed" receipts (receipts for personal as well as Church purposes). Asking for a second receipt just makes everything much clearer for all involved.

AB

Then what do you do when someone submits a "mixed" receipt and there's no way for them to go back to the store and get a different receipt? Do you actually refuse to reimburse?

Historically we've just glared at them and made them buy us one dozen cookies per non-reimbursable item on the receipt (for which they cannot get a reimbursement, since it's a bribe) and then they don't do it again.

On a more serious note, the form which we push out (before purchases happen) is very clear, and we train them really well. It still happens, but usually only once. Either way the policy of reimbursing everything relevant (taxes, etc.) is followed for the amount pertaining to valid Church expenses.

We help members know that keeping everything separate makes our audits, and the Stake Presidency's work, faster/simpler, and as a result we get their money back to them more-quickly; we follow through on that (clean receipts typically get reimbursements back to them in a couple of days, if not the same day on Sunday or Tuesday when the Stake Presidency is available to sign things) to put our money where our mouths are (pun intended) which includes dropping it off to them at home most of the time. Providing relatively tiny extras like that (there's no handbook requirement to drop off checks to people directly, or to have them filled out in any absolute period of time for that matter) at little expense to me seems to get them to follow the rules at little expense to them, which all helps me do my job of getting the Stake Presidency home quickly. Hopefully with the reasons for the requirements explained, they can know they are actually helping their Stake leaders (the important ones) do what they alone can do, and the members can feel good about that contribution they have made..

dajoker wrote:Historically we've just glared at them and made them buy us one dozen cookies per non-reimbursable item on the receipt (for which they cannot get a reimbursement, since it's a bribe) and then they don't do it again.

Part of me hopes you are joking, but I once lived at a location where this actually was the policy. I was never reimbursed for my expenses, because I would not get a separate "for Church use only" receipt, and I would not buy them cookies.

My reward was delightful. It troubled the leaders to no end that they thought they could not reimburse me. I just smiled and told them I was sorry to cause so much consternation, but that the effort required on my part to remove their consternation was not worth it.

I do not think they ever figured it out. But, like all leaders, they eventually were released. The new leaders were happy to accept a receipt with Church items circled, and would even ask if I wanted to be reimbursed for the tax if I did not note it on the receipt.

atticusewig wrote:Of course you're right, but the handbook omits wording like "taxes and service fees" which would easily clear everything up for most of us.

This is probably a case where the normally very concise Handbook would be improved by removing a few words. As soon as there is a list like "materials, supplies, rental or admission fees, or long-distance transportation," people start wondering about various items that are not listed. It would be simpler if it said something like "any costs." I don't think adding words like "taxes and service fees" to the Handbook would help all that much; it would cover a couple more categories, but there would still be others that would not be listed and would still require a judgment call.

Rather than focusing on that particular list, I just think the spirit of the policy is very clear -- Budget funds are used to pay for activities in their entirety; members don't pay for them even in part.

atticusewig wrote: When we have financial training I always hear about how we need to treat the funds as sacred, so I have bit of difficulty when expenses are incurred that can be avoided. But I guess it is much better to accept a little extra cost if it makes the policy more precise.

I certainly agree that it is important to treat the funds as sacred. I think most members would agree with that as well. So if they are making choices that waste those sacred funds, it is most likely an indication that they need some training, which I am happy to provide.

lajackson wrote:Part of me hopes you are joking...

Yes, thus the following paragraph's introduction of 'On a more serious note....'. I cannot imagine that level of sadism in a clerk, but I'm pretty naive. Makes me wonder, though, why was it never possible to get a separate receipt? I suppose there could be cases where that happens, but I cannot imagine one.

dajoker wrote: Makes me wonder, though, why was it never possible to get a separate receipt? I suppose there could be cases where that happens, but I cannot imagine one.

lajackson didn't say it was impossible to get a separate receipt. Specifically, he said:

that the effort required on my part to remove their consternation was not worth it.

Was it possible? Sure. It's also possible to have single item transactions, so that every receipt reflects only a single item. I'm sure reimbursing members on an item-by-item basis would provide the organizations a great deal of detail on how their budget is spent. But the hassle and inconvenience to the member just isn't worth it. If the ward/stake wants to enforce a made-up rule at the cost of a clear violation of the policies in the handbook, I suppose that's for them to decide. It's for the members to decide just how much inconvenience they're willing to go through in order to be reimbursed. Providing receipts is not a hassle. You get them when you buy stuff. Getting a separate receipt is more of a hassle. You have to divide out what you're buying for yourself from what you're buying for the activity. You have to run two separate purchases. It's a headache.

allenjpl wrote:lYou have to run two separate purchases. It's a headache.

There are retail establishments that will not provide separate receipts on a single checkout. They will provide one receipt per checkout. So to get separate receipts one would have to got back through the checkout the second time.

I know this sounds trite and ridiculous but I have run into this very situation.

I've also run into a situation where a receipt for a Cub Scout dinner had something like 8 packages of hotdogs & a similar amount of buns, but it was clear from the paperwork they only wanted reimbursement for 6 of the 8 items purchased. The sister who bought the food was going to take home the unused items and keep them for her family use. She purposely overbought in order to not run the risk of coming up short. In this case, a separate receipt would not have been practical.

Yes, it takes a few extra moments to calculate the tax needed for reimbursement, but seriously, it's not that hard or time consuming. Even in states like in Utah, where there is a separate tax rate for food and merchandise that is combined on the same receipt.

Mikerowaved wrote:
Yes, it takes a few extra moments to calculate the tax needed for reimbursement, but seriously, it's not that hard or time consuming. Even in states like in Utah, where there is a separate tax rate for food and merchandise that is combined on the same receipt.

So after reading this entire thread and looking at the references to the Handbook, I feel like that even though a member may not request reimbursement for the tax that they paid on some food items, I would be more in keeping with the Handbook if I went ahead and calculated the tax and reimbursed the member. [1]

Thank you!


[1] The example I have seen in my ward is that a member goes to the store, buys personal items AND church-use items on one receipt, circles the church-use items and requests reimbursement for the sum of the church-use items WITHOUT calculating tax. We've always verified their math and reimbursed accordingly (not reimbursing for tax).