Washington

Contact Person/Dept.:  Taxpayer Services Division

Agency:  Washington Department of Revenue

Tel. No.:  (800) 647-7706

1. If your State exempts fundraising sales by certain groups from sales or use taxes, please indicate which of the following are exempt in your State.

Most nonprofit organizations, including those listed in your survey, are exempt from tax on periodic fundraising activities. For tax purposes, the term "fundraising activity" does not include the operation of a regular place of business. Generally, the operation of a regular place of business by a nonprofit organization results in a sales tax collection obligation.

1a  Are local sales and use taxes applied in the same manner to these groups?

Yes

1b Please set forth any comments including a list of groups not listed about whose fundraising activities are exempt from sales and use taxation in Washington.

See answer to 1."Nonprofit organizations" exempt from sales tax collection responsibilities on qualifying fundraising activities include organizations exempt from tax under sections 501(c)(3),(4), and (5) of the Internal Revenue Code; organizations that would qualify for tax exemption under these codes if organized as a nonprofit corporation; and nonprofit organizations that do not pay members, stockholders, officers, directors, or trustees any amounts from its gross income except as payment for services rendered, do not pay more than reasonable compensation to any person for services rendered, and do not engage in a substantial amount of political activity.

 

2. If your State exempts fundraising sales of certain products from sales and use tax, please indicate which of the following products are exempt.

There are no fund raising exemptions specifically directed at certain products.

However, school-related organizations often act as the agent for book publishers when they conduct book fairs. Typically, the fund raising organization keeps a predetermined percentage of the sales price. Under this circumstance, the publisher is subject to the retailing classification of the business and occupation (B&O) tax on the gross amount of the sale. In addition, retail sales tax must be collected and remitted by the publisher. The school-related organization must collect the retail sales tax at the time of the sale and turn it over to the publisher. It is not subject to tax on the portion of the sales price that it keeps.

2a Are local sales and use taxes in your State applied to these products in the same manner as State sales and use taxes are applied to these products?

Yes

2b Please set forth any comments including a list of products not listed above that are exempt from sales and use taxation for fundraising purposes in your State.

see answer to 2

 

3. If some or all fundraising groups or products qualify for exemption from sales and use tax in your State, please indicate any exceptions to or limitations on such exemptions. (Check all that apply and specify the limitation.)

There are no limits to the number, duration, dollar amount per event or total dollars raised per year for a qualified nonprofit organization conducting periodic fundraising activities.

 

4. If some or all fundraising groups qualify for exemption from sales and use tax in your State, please set forth the procedure through which a group may establish its qualification for the exemption. Attach relevant statutes, regulations, procedures, etc.

There are no formal procedures a nonprofit organization must go through to establish its qualifications for the fundraising exemption. Please refer to the answer to 1.

 

5. If some or all fundraising products qualify for exemption from sales and use tax in your State, please set forth the procedure for establishing a product’s qualification for the exemption. Attach relevant statutes, regulations, procedures, etc.

See answer to 2

 

6. In instances where a fundraising product or group is not exempt from sales or use tax, please indicate who bears the responsibility for collecting and remitting the tax.

See answers to 1 & 2

 

7. In instances where a fundraising product or group is not exempt from sales or use tax, what is the basis for calculating the sales/use tax?

See answers to 1 & 2

 

8. Provide any additional information regarding the sales and use tax treatment of fundraising transactions and/or groups in your State. Also set forth any statements, disclosures, disclaimers, etc., to be provided as part of the clearinghouse regarding your state’s practices and procedures. Attach additional sheets if necessary.

Please see WAC 458-20-169