Tax Deductible Donation or Sales

Question: How does “tax deductible” donation work in regard to selling t-shirt, tapes, books, etc.? Is it a matter of wording…to not have to pay sales tax?

Answer: You have really asked 2 questions. First at the bottom of every contribution statement the IRS requires the wording: "Pursuant to Internal Revenue Code requirements for substantiation of charitable contributions, no goods or services were provided in return for trhe tax deductible contributions." There is no wiggle room in that. There is no ability to give contribution status to the sale of t-shirts, tapes or books. If you price the item it is not charitable giving. I am sure you are now thinking about TV evangelists and their offer to send you something "for a gift of $10 or more." They are not sending our contribution statements for those amounts. If they do the IRS will come after them as we have seen happen to others recently.

Second paying sales tax is not a matter of wording it is a matter of the situation. If you are set up regularly to sell priced items as a source of income then you are required to collect and remit sales tax. If you are simply reselling items (at cost) for the convenience of your congregation then that is not sales it is simply a reimbursement of cost.