Not all organizations are exempt from paying sales tax on fundraisers, even if you are a non-profit organization, such as a school. Every state has different rules on how sales tax is handled. Here are the classifications from most lenient to most strict:
- Tax-free states (Delaware, Montana, New Hampshire, Oregon)
- No tax with proper documentation (For example, a tax-exempt certificate)
- No tax if the proper conditions are met (For example, Texas allows two tax-free days per calendar year to
qualifying organizations.) - Tax on certain types of items (For example, non-food products)
- Tax on all items (Some states charge the same tax rate on all items, while others will charge a lower rate on
certain types of items, such as food.)
Regardless of a state’s tax rules, whether we charge sales tax on an order depends on whether we meet a specific state’s physical nexus requirements. If we have established a nexus in a given state, then we must follow the tax laws of that state. If the state requires that sales tax be paid, we will collect it from you and then remit payment on your behalf to your state’s department of revenue (DOR).
On the other hand, if your state charges sales tax on fundraisers and we have not established a nexus, then we will not charge any sales tax on our end. It is therefore your responsibility to pay any tax owed on your end.
We will not know if tax will be charged on your order until your order is placed and our system processes it. In some cases, if tax is applied to your order, we can remove it once we review your tax-exempt information.
For further questions, we recommend contacting your state’s DOR.