45 IAC 2.2-5-58 - Not-for-profit organizations for educational, cultural or religious purposes; sales
Authority: IC 6-8.1-3-3
Affected: IC 6-2.5
Sec. 58.
(a) The
state gross retail tax shall not apply to sales by qualified not-for-profit
organizations of tangible personal property of a kind designated and intended
primarily for the educational, cultural or religious purposes of such qualified
not-for-profit organization and not used in carrying out a private or
proprietary business.
(b) The gross
receipts from each sale of tangible personal property by a qualified
not-for-profit organization are exempt under this rule [45 IAC 2.2]
only if:
(1) The nature of the
property sold will further the educational, cultural or religious purposes of
the organization; and
(2) The
organization is not carrying on a private or proprietary business with respect
to such sales.
(c)
Furthering the educational, cultural or religious purpose. The primary purpose
of the property sold must be to further the educational, cultural or religious
purpose of the qualified not-for-profit organization.
-EXAMPLE-
(1) The
sale of textbooks and supplies by a parochial, public or private not-for-profit
school is exempt if made to students of the school in grades one through
twelve. Such sales are primarily intended to further the educational purposes
of the school.
(2) The sale of
bibles, choir robes and prayer books by a religious organization is exempt.
Such sales are primarily intended to further the religious purposes of the
organization.
(3) The sale of meals
by an art gallery is taxable. The meals are intended primarily for the
convenience of visitors.
(4) The
sale of textbooks and other educational materials by a secretarial school which
is operated for profit is taxable. A profit-making educational enterprise is
not a qualified not-for-profit organization under this regulation [45
IAC 2.2].
(5) The sale of
greeting cards by a church bookstore is taxable. Such sales are not primarily
intended to further the religious purposes of the organization.
__________
(d) Qualified not-for-profit organization.
This regulation [45 IAC 2.2] applies only to qualified
not-for-profit organizations. For example, the sale of educational books by a
social club is taxable. A predominantly social not-for-profit organization is
not a qualified not-for-profit organization with respect to sales and use
tax.
(e) Definition. Refer to
Regulation 6-2.5-5-25(a)(010)(2) [ 45 IAC 2.2-5-55(b) ] for
the definition of a "qualified not-for-profit organization".
Notes
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