How to Understand the Relationship Between Non-Profit Organizations and Sales Tax Exemption

by | Mar 31, 2017 | Consulting

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As a non-profit organization, qualifying for the exemption from federal income tax, you will also wish to claim Minnesota sales tax exemption. Being exempt from the tax can dramatically increase the funds available to your local charitable work.

Seek Help from Non-Profit Experts

By working closely with your professional legal firm, they will be able to provide you with all the information necessary so that you can ensure that you comply exactly to all the rules and regulations relating to Minnesota sales tax exemption.

Your nonprofit organization will be required to pay or collect sales tax across a variety of circumstances unless your Minnesota sales tax exemption is current. Meeting with your legal firm, they will be able to advise you about any areas where you are concerned that your activities might take you out of the exemption list.

What the Sales Tax Exemption Means to Your Nonprofit

Having achieved the tax exemption status for sales tax, your nonprofit will not need to pay sales tax or charge sales tax in any transactions completely related to your charity’s work.

Where your charity’s work applies across different states, you will need to liaise carefully with your legal firm to make applications that cover each state where you may be seen to be trading and would otherwise need to charge sales tax.

This may be further confused when your organization operates from one state but carries out activities in other states that would normally require them to charge sales tax through their work. You can see how it is important that your legal firm explains the standing required for your state and other local states where your work may overlap.

Your legal firm will need to be experts within the nonprofit marketplace, which allows you to continue to manage your charity and continue to raise funds for good causes.

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