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Sales Tax Exemptions for Nonprofits

Many states offer nonprofits a sales tax exemption on event fees and sometimes merchandise sales. (Note: selling is different than a buyers exemption). The RunSignup sales tax system makes it simple for nonprofits to comply with the complex labyrinth of collecting sales tax appropriately.

There are two things that nonprofits must do to get the appropriate tax treatment in the RunSignup system:

  1. All nonprofits must provide appropriate documentation to RunSignup to validate your nonprofit status. This is typically done when you set up your RunSignup or GiveSignup payment account. The two basic forms are your 990 form and your letter from the IRS granting 501c3 (or similar) status.
  2. Complete the Exemption Status on the Sales Tax Setup page on your RunSignup or GiveSignup Dashboard.

For example, race fees are taxed in Hawaii. However, nonprofits are exempt from those fees if they meet certain conditions set forth by Hawaii:

Enabling this exemption and signing the page at the bottom is your agreement that you meet and accept liability for these requirements.

Nonprofits can set this up only for the state they are operating in, or can set it up for any states they may operate in. You must agree to each individual state since they each have different laws.

The good news is that once you set up these two items, RunSignup will calculate and collect and distribute appropriately based on whether the state is a Marketplace State or NonMarketplace state.

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