Florida Taxes Non-profit Gift Shop Sales

Wednesday, October 29th, 2014

A gift shop.

The Florida Department of Revenue issued a Technical Assistance Advisement stating that sales by 501(c)(3) organizations are not automatically exempt from sales tax.

The taxpayer is an at-risk youth home ("Home") and is a 501(c)(3) entity. The Home is an extended ministry of a Church but operates as a separate, non-religious, entity. The Home has an onsite gift shop. The Home plans to open a thrift shop where it will sell donated items to the general public. Also, the thrift shop will occasionally purchase "heavily discounted" items for resale. The thrift shop, gift shop, and Home are all the same entity.

A 501(c)(3) entity is a non-profit charitable organization. Florida exempts sales and donations to 501(c)(3) entities when the purchased or donated item is used by the 501(c)(3) entity in its customary services. Florida law also exempts sales by religious organizations and institutions that benefit minors. The exemption is not automatic. An entity must apply for a certificate of exemption as a religious organization or institution that benefits minors.

The Home is only categorized as a 501(c)(3) entity. As the Home is a separate legal entity from the Church, the Church's religious organization status does not extend to the Home. Therefore, sales to the Home are exempt, but sales by the Home are not. The Home could apply to be a religious organization or institution that benefits minors and amend its certificate, and then sales by the Home would be exempt.


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