Do nonprofit organizations pay or charge sales tax on their purchases or sales in Washington?

Modified on 2020/11/20 16:21 by Jeremy Stroud Categorized as Budget, FAQ

<p>The Washington State Department of Revenue responds in the following <a href="https://dor.wa.gov/education/industry-guides/nonprofit-organizations" target="_blank" class="externallink">FAQ</a>:</p>
<p>&ldquo;Generally, nonprofit organizations must pay retail sales tax on all purchases of tangible personal property and must collect retail sales tax on their sales of such items. However, nonprofits conducting qualifying fundraising activities may purchase goods and services that will be resold at such events without paying sales tax by providing a reseller permit to the seller. Additionally, the income generated from qualifying fundraising event is not subject to either retail sales tax or the business and occupation tax.&rdquo;</p>
<p><a href="http://apps.leg.wa.gov/WAC/default.aspx?cite=458-20-169" target="_blank" class="externallink">WAC 458-20-169</a>, in discussing fund-raising activities that would not be tax-exempt, states:</p>
<p>&ldquo;(iv) Nonqualifying activities. Fund-raising activity <strong>does not include the operation of a regular place of business</strong> in which services are provided or sales are made during regular hours such as a bookstore, thrift shop, restaurant, legal or health clinic, or similar business. It also does not include the operation of a regular place of business from which services are provided or performed during regular hours such as the provision of retail, personal, or professional services. A regular place of business and the regular hours of that business depend on the type of business being conducted.</p>
<p>(v) Fund-raising sales by libraries. <a href="http://apps.leg.wa.gov/RCW/default.aspx?cite=82.04.3651" target="_blank" class="externallink">RCW 82.04.3651</a> specifically provides that <strong>the sale of used books, used videos, used sound recording, or similar used information products in a library is not the operation of a regular place of business, if the proceeds are used to support the library</strong>. The library must be a free public library supported in whole or in part with money derived from taxes. [RCW-27-12-010|RCW 27.12.010].&rdquo;</p>
<p>Confused? The Washington State Department of Revenue offers a very helpful video, &ldquo;<a href="https://dor.wa.gov/workshops-education/watch-online-workshop-or-tutorial/video/nonprofits-wa" target="_blank" class="externallink">Nonprofits in WA</a>&rdquo; on this complex topic. Additional guidance may be found in the Department of Revenue&rsquo;s brochure, &ldquo;<a href="https://dor.wa.gov/sites/default/files/legacy/Docs/pubs/industspecific/nonprofit.pdf" target="_blank" class="externallink">Nonprofit Organizations</a>.&rdquo;</p>

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Do nonprofit organizations pay or charge sales tax on their purchases or sales in Washington?