Tax Exempt Certificate

I have been asked for the Tax Exempt certificate to allow for a reduced price on equipment. I have never seen such a thing. Can anyone direct me?

Michael Klobas

mklobas wrote:I have been asked for the Tax Exempt certificate to allow for a reduced price on equipment. I have never seen such a thing. Can anyone direct me?

There may be some guidance in the thread Employer Identification Number regarding a federal tax identification number. But a "Tax Exempt certificate" sounds like something that would be issued by a state, so the laws and procedures would vary from state to state. The Church's Tax Department would probably be able to help.

It's probably different over there, but over here we usually pay the full price and claim the tax back. MLS has been configured to allow us to do this, putting a separate category for tax that gets reimbursed every month. Area offices then claim the tax for the whole region back every financial year end. But like I said, it may be completely different over there.

In most states, an exempt entity must give an exemption certificate to its vendors when it makes purchases qualifying for a sales tax exemption. The vendor holds on to the certificate and shows it to the auditor when the auditor questions why it did not collect sales tax.

I assume you are in California. If so, besides checking with the church's tax department, you might consider consulting this publication: http://www.boe.ca.gov/pdf/pub18.pdf . I belive, but am not certain, that California does not exempt equipment purchases by religious organizations from sales tax.

We have to be careful not to give out specific tax advise here, since each situation and location can result in quite different answers to the same question.

The best thing to do is contact the Church directly. Here's the contact information...

Tax Administration
50 East North Temple Street, Room 2223
Salt Lake City, UT 84150-3620
Telephone: 1-801-240-3003 or 1-800-453-3860, extension 2-3003

-Mike

I called the Church and learned that there is no California exemption for the church, and accordingly, no certificate.

Thank you for your help.

mk

As a more recent follow-up, I called the tax department today trying to obtain a tax exempt certificate. For those states that do reimburse taxes to the church, CHQ now covers/pays the tax (as long as it is clearly marked on a receipt and entered correctly when preparing the expense) and they take care of getting reimbursed. Because ward budgets are no longer hit for the tax in these states (Utah & North Carolina), it seems they are not willing to give out certificates any more.

crislapi wrote:As a more recent follow-up, I called the tax department today trying to obtain a tax exempt certificate. For those states that do reimburse taxes to the church, CHQ now covers/pays the tax (as long as it is clearly marked on a receipt and entered correctly when preparing the expense) and they take care of getting reimbursed. Because ward budgets are no longer hit for the tax in these states (Utah & North Carolina), it seems they are not willing to give out certificates any more.

Some states no longer have tax exempt certificates. They serve no purpose. In some states, for example, (I think Utah is one of them) the merchant is required to collect the tax no matter who you are. At the end of the year, if you are tax exempt, you claim the amount of tax you paid and are reimbursed by the state.

It certainly varies by state. I have a form for the State of Nebraska with a tax exempt ID assigned to the Church. Some vendors will just take the number, others want a copy of the form and others don't want to be bothered.