Gas Receipts

I just recently received some receipts from our Young Men's president for gas to and from our ward's youth conference. When he was filling out the reimbursement request, he was unsure how to handle the taxes on the gas. Are we able to list gasoline taxes or are is the Church not exempt from them?

When possible, purchases should be made using the tax exempt number for the Church. Your stake should have a form that has this number on it. Each state has different requirements on how tax exempt purchases are to be handled. Follow local procedures.

For those cases where it is not possible to make a purchase tax exempt then the reimbursement request should be processed to include the full amount of the purchase, including tax. There is a provision in MLS to declare the taxes for a reimbursement request.

Tax Recording
When you enter an expense in MLS to print a check, enter the tax paid (if any) in the Tax field. This amount is for reporting purposes only and does not add to the amount of the check recorded in the category section of the screen.

Once a purchase is made there is no way to recover those taxes at the local level.

jdlessley wrote:When possible, purchases should be made using the tax exempt number for the Church. Your stake should have a form that has this number on it. Each state has different requirements on how tax exempt purchases are to be handled. Follow local procedures.

For those cases where it is not possible to make a purchase tax exempt then the reimbursement request should be processed to include the full amount of the purchase, including tax. There is a provision in MLS to declare the taxes for a reimbursement request.

Once a purchase is made there is no way to recover those taxes at the local level.

What you said may be true for Ohio, but it is not correct for Utah (and I believe North Carolina is on the same program). In Utah, we are instructed to pay sales tax and then record it in MLS. We no longer use tax exempt numbers for purchases. Near the end of the year we receive a refund of sales taxes paid. This is based on an arrangement the Church has made with the state of Utah.

So to return to the original question: it is only sales tax that is listed separately on a receipt that can be claimed. I don't believe there is any Utah sales tax on gasoline (although there are federal and state gasoline taxes); it certainly is true that sales tax is not itemized separately on gasoline purchase receipts. So there is no tax to be reimbursed on gas purchases.

Alan_Brown wrote:What you said may be true for Ohio, but it is not correct for Utah (and I believe North Carolina is on the same program). In Utah, we are instructed to pay sales tax and then record it in MLS. We no longer use tax exempt numbers for purchases. Near the end of the year we receive a refund of sales taxes paid. This is based on an arrangement the Church has made with the state of Utah.

Alan, let me make sure I'm understanding correctly, you receive a check from the state/CHQ for the refund of sales tax paid each year?
Is that amount then added back into your allotted budget? How is that done in MLS? Does it go to the Stake or the Ward? Does it go to the Stake, and then to the ward?

If this is working the way it seems to me from what you've said, outside of Utah/NC our budgets take greater hits by not using the tax exempt information, and just recording the sales tax.

jshawut wrote:Alan, let me make sure I'm understanding correctly, you receive a check from the state/CHQ for the refund of sales tax paid each year?
Is that amount then added back into your allotted budget? How is that done in MLS? Does it go to the Stake or the Ward? Does it go to the Stake, and then to the ward?

If this is working the way it seems to me from what you've said, outside of Utah/NC our budgets take greater hits by not using the tax exempt information, and just recording the sales tax.

It's not an actual check; rather, it is a separate line item on the Budget Allowance letter the stake receives from CHQ in the 4th Quarter. It is a refund of Budget Allowance, or an additional allowance, whichever way makes more sense to you. The amount is broken down by ward, so we know precisely how much of that sales tax refund is attributed to each ward. The amount varies from ward to ward, but it's typically around $200-300 per ward for the year.

Since these are regional policies, I don't know exactly how other states are affected, but it would make sense that if you are paying sales tax but not receiving a refund on your Budget Allowance, it is a hit to your budget, so making purchases on a tax exempt basis would make financial sense.

jshawut wrote:Is that amount then added back into your allotted budget? How is that done in MLS? Does it go to the Stake or the Ward? Does it go to the Stake, and then to the ward?

I just realized I didn't explicitly answer this set of questions. As with all budget allocations, it goes first to the stake, and then the stake chooses what portion of that to give to the wards. In our stake, we choose to refund to each ward the full amount of the refund that was attributed to that ward (which only seems fair, since they paid that much sales tax, and their efforts to record the sales tax made the refund possible), but different stakes may process this differently.

We send a letter to each ward each quarter, telling them exactly what their budget allowance is for the quarter. The 4th quarter letter simply has one extra line item telling them what their sales tax refund is.

As for MLS, there is nothing special -- the wards process the 4th quarter budget allowance from the stake exactly as they process all the other quarters. The amount just happens to be a bit higher because of the sales tax refund.

Alan_Brown wrote:As with all budget allocations, it goes first to the stake, and then the stake chooses what portion of that to give to the wards.

Our Stake used to pass the refunds back to the Wards, but the past couple of years they've been holding it to help offset Stake expenses. I guess things like the youth pioneer trek and things like that hit the Stake budget pretty hard.

Alan's right though. Ultimately, the Stake chooses what to do with the funds.

jshawut wrote:If this is working the way it seems to me from what you've said, outside of Utah/NC our budgets take greater hits by not using the tax exempt information, and just recording the sales tax.

You are correct. If your state is like ours, Ohio, the MLS tax information means absolutely nothing in regards to getting any funds back. If we do not process purchases with a tax exempt form then the ward budget loses those funds.

When I do audits I try to emphasize using the tax exempt forms. In one case a ward lost 11.8% of their Young Men and Young Women budgets to taxes paid.