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When selling services to companies and organizations that are (or claim) to be non-profits are we required to charge sales tax?

Full Question: When selling our amusement rentals and event planning services to NC companies and organizations that are or are purported to be non-profits (such as schools, universities, churches, and other non-profit entities,) are we required to charge Sales Tax on taxable items? Some of these companies think they are tax exempt. We need to know our sales tax responsibilities/liabilities in these circumstances. Thank you.

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Answer:

Diane Yetter photoIn North Carolina, non-profit organizations, schools, and churches generally must pay tax on both their purchases and sales. Such organizations may apply for semiannual refunds of sales and use tax paid by the above types of qualified organizations and institutions on direct purchases of tangible personal property for use in carrying on their nonprofit work. When an institution or organization (including a nonprofit organization) purchases taxable tangible personal property for use from a North Carolina supplier or a registered out-of-state supplier who charges the State and local sales or use tax, the organization must pay the tax to the supplier. If the items sold to the organizations are being resold by the Non-profit entity, they should be registered as a retailer and can then provide you with a resale certificate including their North Carolina registration number. Therefore, non-profit entities such as churches and other religious institutions, non-profit educational institutions, and charitable organizations must pay tax on their purchases, so you are required to charge sales tax on taxable items sold to them.

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