There are changes to how Indiana sales tax affects nonprofit organizations. These changes went into effect on July 1, 2022. Indiana’s Information Bulletin #10 outlines these changes in detail, but the biggest changes are below:
- Depending on the items sold, qualified nonprofits are subject to sales tax once sales reach $20,000. This threshold replaces the previous 30-day rule.
- Once sales reach $20,000, the organization is required to collect state gross retail tax on sales on an ongoing basis for the remainder of the calendar year.
- Even if no sales tax is due, the organizations may be required to file a zero return for sales tax.
- Bulletin #10 outlines instructions on how to register with the Department of Revenue and get a Retail Merchant Certificate.
- If the items sold are intended primarily to further the educational, cultural, or religious purposes of the organization, the sales tax does not apply, and the items may be sold exempt throughout the year.
- The Bulletin also describes how sales tax applies to items purchased by the nonprofit. Purchases may or may not be exempt from sales tax depending on the organization type or use of products purchased.
If you have questions about the recent changes to how nonprofits must comply with sales tax in Indiana, please contact your accountant at Kemper CPA Group. We can help you devise a plan to remain in compliance with updated Indiana sales tax rules. Consult with us about your circumstances to determine the best course of action.
