Nonprofit Section Meeting: State and Local Tax Considerations for Exempt Organizations

Overview

Exempt organizations often overlook the complexity of state and local tax, particularly sales and use taxes under a presumption that most of their business activity is exempt. Unfortunately, there are no blanket sales tax exemptions shared among the states for exempt organizations, regardless of whether an entity’s purpose is charitable, educational, religious, or even state-related. That said, favorable treatment does exist – although it depends on how that treatment may apply to an exempt organization’s activities.  A number of factors influence whether and how sales and use tax exemptions may apply. A few examples include: (1) What type of exempt organization is the entity and what is its purpose? (2) What types of sales are made? (3) What types of purchases are made and are they intended for the exempt organization’s own use? 
 
Every exempt organization should consider examining not only those factors, but also general characteristics and nuances of state and local taxes, such as nexus, taxability, potential exemptions and most importantly, the laws of the specific state or locality where the organization operates. Whether an exempt organization is transacting business in a new state, implementing a new type of revenue generator, or has received a state tax notice in the mail, state and local tax compliance obligations can vary significantly for exempt organizations.  Proactively addressing proper sales and use tax compliance is paramount, especially considering that an “everything’s exempt as a nonprofit” policy is hardly ever the case. Exempt organizations must be diligent in considering how existing state and local sales tax obligations can impact their organization.
 
Other state and local tax considerations for exempt organizations include alternative investment consulting, unclaimed property tax compliance and automated software solutions.   Please join me in learning more about these state and local tax considerations.

The session will start with virtual networking via breakout rooms from 8-8:30am and the session will run from 8:30-9:30am.

Prerequisites

None

Objectives

Attendees will gain an understanding of the following:
• Differences between on-premises and cloud-based solutions
• What accounting systems are recommended for and commonly used by nonprofit organizations
• The core and enhanced features to look for in an accounting system
• How to prepare for and manage the system selection process to find the best solution for your organization

Preparation

None