California sales tax

[manyhappyreturns]

Client belongs to Catholic Daughters group, a non-profit that has rummage sales 3 times per year to make money for the church. A new member of the group has been telling everyone that they should be charging sales tax on the items purchased at the rummage sales, and is also telling them they need to go back in time and pay sales tax on all items sold in past rummage sales. In addition, the group has a little store where they buy and resell at cost certain religious items for communion and baptisms, the purpose of the store being to make these items available to church members at cost, not to make a profit. So, not really sure if they should be going thru the whole sales tax thing. Seems kind of ridiculous because there is no profit involved. I've never heard of anyone collecting sales tax at yard sales or rummage sales.

[Roland Slugg]

Well, a church that operates an actual store, and also sponsors three rummage sales per year isn't quite the same as a private individual who has a garage or yard sale once in a blue moon. Nevertheless, I don't believe the rummage sale activity constitutes an activity requiring a sales tax license or the collection of sales tax. The items sold are brought there by church members and the public where they are converted into cash, and the cash is then donated to the church. In that regard it's similar to a "multi-person" garage sale, and those are exempt from sales tax in California.

The sales of goods in the church's own store may be a different matter, and if you want an authoritative answer, I suggest you do a little reading on the California Board of Equalization's web site. There may be a church or other de minimis exemption.

As for that busybody who's telling everybody what to do, someone may wish to suggest that HE can report HIS purchases on HIS own California tax return if HE wants to. Betcha he won't.

[TAXNJ]

Mr Slugg

Well, a church that operates an actual store, and also sponsors three rummage sales per year isn't quite the same as a private individual who has a garage or yard sale once in a blue moon. Nevertheless, I don't believe the rummage sale activity constitutes an activity requiring a sales tax license or the collection of sales tax. The items sold are brought there by church members and the public where they are converted into cash, and the cash is then donated to the church. In that regard it's similar to a "multi-person" garage sale, and those are exempt from sales tax in California.

The sales of goods in the church's own store may be a different matter, and if you want an authoritative answer, I suggest you do a little reading on the California Board of Equalization's web site. There may be a church or other de minimis exemption.

As for that busybody who's telling everybody what to do, someone may wish to suggest that HE can report HIS purchases on HIS own California tax return if HE wants to. Betcha he won't.

Compliments. Well stated with good reference and the "busybody" recommendation was great

[manyhappyreturns]

Rummage sales not exempt

I did research on the BOE website and was surprised to find that money received for the sale of tangible goods by a nonprofit organization, including rummage, is taxable by the state of California. That's crazy! All the take at a rummage sale is donated to the church (or other charity) and the state benefits from the sale by collecting the sales tax. What makes that really crazy is that everything at a rummage sale is donated by members, and all the workers are volunteer, and the state benefits monetarily from it. So that means craft items made to sell at a church bazaar, baked goods (also with donated time and ingredients) for bake sales for charities, meals prepared with donated ingredients and served by volunteers for fundraising purposes, etc etc etc, are all taxed. Churches have fundraising activities often, but I doubt if many of them, if any, know the law and actually collect sales tax.

[FEDUKE404]

Dealing with The Golden State

I did research on the BOE website and was surprised to find that money received for the sale of tangible goods by a nonprofit organization, including rummage, is taxable by the state of California. That's crazy! All the take at a rummage sale is donated to the church (or other charity) and the state benefits from the sale by collecting the sales tax. What makes that really crazy is that everything at a rummage sale is donated by members, and all the workers are volunteer, and the state benefits monetarily from it. So that means craft items made to sell at a church bazaar, baked goods (also with donated time and ingredients) for bake sales for charities, meals prepared with donated ingredients and served by volunteers for fundraising purposes, etc etc etc, are all taxed. Churches have fundraising activities often, but I doubt if many of them, if any, know the law and actually collect sales tax.

Most interesting.

Roland Slugg's comments were worthy of note, especially for the regular sale of religious items "at cost." I would not be surprised, at all, to see many states impose a sales tax on such items.

As for applying sales tax to church bazaar sales, "yard" sales, and the like. . .well, you **ARE** dealing with California (aka "Little Greece") tax rules. Absolutely nothing I hear (from afar) about CA taxation policies surprises me any more!

FE

[manyhappyreturns]

Most interesting.

As for applying sales tax to church bazaar sales, "yard" sales, and the like. . .well, you **ARE** dealing with California (aka "Little Greece") tax rules. Absolutely nothing I hear (from afar) about CA taxation policies surprises me any more!

FE

Yeah, me neither. Every time an item changes hands in California, the state wants to collect sales tax. The "at cost" resale shop was meant to make it more convenient for church members to obtain the items without everyone having to go to the Catholic supply store. They can include the sales tax in the "at cost" but that way the state ends up getting double the sales tax on those items due to the 2 exchanges.

I am in the middle of trying to get another issue resolved regarding California income tax. I've been in this similar situation many times and it can take years to solve even the simplest issue, that is, if the issue means more money for the state, at least temporarily. A client of mine got a letter from the Franchise Tax Board saying she still owes $600 or so on her 2013 tax rerurn, but there is absolutely no explanation as to how they arrived at that figure. Just a letter stating tax amount they said she owed, the amount already paid, the balance due plus penalties and interest. I checked her return, a relatively simple one at that, and have no clue how they came up with the balance due, and neither the client or I can get hold of them to solve it. When a person contests a tax levy, they say they need 60 days to consider it, then once you get hold of them after the 60 days, they say they need another 60 days, and on and on for possibly years. Meanwhile, they withhold future refunds and/or garnish wages or bank accounts. The only way to fight it is to keep pestering them and get the client to change their withholdings so there is no refund to snag, although they might just go for the wages anyway.

I have another client whose house burned down in 2010 and also lost his truck that got burned up as well, and every year the state of CA snags his vehicle registration (which for trucks in CA is rather high), and he hasn't been able to convince them yet that the truck is no longer in service.

[TAXNJ]

STATE REPs

Have you tried addressing the issue with your state reps along with other religious groups? You maybe able make a change in CA.

Tell them in the long run they will have answer to a HIGHER authority as to what they are doing!!

[kathyc2]

Yeah, me neither. Every time an item changes hands in California, the state wants to collect sales tax. The "at cost" resale shop was meant to make it more convenient for church members to obtain the items without everyone having to go to the Catholic supply store. They can include the sales tax in the "at cost" but that way the state ends up getting double the sales tax on those items due to the 2 exchanges.

Seems like if the church is buying items for resale they can file to be exempt from sales tax at the time of purchase just like a for-profit company would.

[manyhappyreturns]

Have you tried addressing the issue with your state reps along with other religious groups? You maybe able make a change in CA.

Tell them in the long run they will have answer to a HIGHER authority as to what they are doing!!

No, sounds like that might be a long involved process with a very small chance of getting anywhere. How's that for a negative attitude? If I can just keep CA from garnishing my clients' wages for taxes they don't owe, I'll consider myself victorious.

[manyhappyreturns]

Seems like if the church is buying items for resale they can file to be exempt from sales tax at the time of purchase just like a for-profit company would.

I'll check into that.