Sales Tax for Faith-based Organizations

If you and your church want to be sure about whether or not you are exempt from the sales tax, check with your specific state. States have very varying rulings about sales taxes.

Find out if you need to charge sales tax:

  • Start by looking into your state's Department of Revenue, within the Sales Tax Division. Research the forms and publications to find the sales tax rulings.
  • Most states do not tax food items. Your state will have a listing of what is and what is not taxable for your state. Go to the Department of Revenue for your state and look under publications.
  • Give your state's Department of Revenue a call and ask for assistance if needed.

Some factors you might need to consider:

  • Frequency of sale: Do you sell items once a year, month, or weekly?
  • Type of products: Do you sell coffee, mugs, non-food or only food items?
  • Who is putting up the money (i.e., an individual using the church as a place to sell the products, or the church/a group within the church itself). It is possible an individual using the church to sell would need the file for a permit.

If you find you do need to collect sales tax:

  • Figure out the tax amount for each product you are selling and have a list of the price with tax available for you to easily reference. Add the sales tax to the price of the product you are selling. Keep track of what is taxable when you sell your products.
  • If you have taxable sales you will need to report the entire dollar amount of all sales before tax was included, deduct out the non-taxable sales items and calculate the percent due on the taxable amount. You should have this included in your receipts.

If you find you don't want to sell it because of the extra work involved with any applicable sales taxes, you just can serve our products at your church instead, such as during coffee hour.