TOOLS
FOR AFFILIATED FUNDS
Fundraising
Policies & Guidelines A
number of the fundraising tax implications that may apply to affiliated
funds and donors of the Foundation are listed below. For more information,
contact the Foundation Accounting
Office at 402/323-7334 / e-mail.
Sales
Tax Exemption
As
an affiliated fund of the Nebraska Community Foundation with 501(c)(3)
status, you MUST pay state and city (if applicable) sales taxes
on items you purchase for your own use, including items that will be
given away to others.
If you purchase items for resale, you may purchase those items
tax-free and you will need to supply a Nebraska Resale or Exempt Sale
Certificate (Form 13) to the seller at the time of the purchase (see
attached). To receive Form 13 contact the Nebraska
Department of Revenue or submit your request, name and address here.
Sales
Tax on Fundraisers
Donations
to nonprofit organizations are not taxable PROVIDED the donation
does not result in the granting of admission to an event or place, or in
the transfer of property such as a meal, cap, book, etc.
Sales
of Products:
Affiliated funds selling items to raise funds MUST collect
Nebraska and applicable local sales tax on all sales.
The current Nebraska Sales Tax rate is 5%.
See the Notice to Nebraska and Local Sales and Use Tax
Permit-holders (7/1/2000) for a list of the sales tax rates
currently applying to taxable transactions in cities across Nebraska.
For a copy of this notice contact the Nebraska
Department of Revenue or submit your request, name and address here.
Donations
which provide benefit to the donor:
When a donation results in the granting of admission to an event,
the transfer of property, or the provision of food, the affiliated fund
must determine the fair market value of the admission, property, or food.
The amount received that represents the fair market value of the
admission, property, or meal is a retail sale, and the affiliated fund MUST
collect and
remit the Nebraska and applicable local sales tax on that amount.
If the charge for the fair market value and the donation are not
separately stated, the TOTAL charge is taxable.
The affiliated fund must indicate on any ticket, receipt or other
item issued in connection with the payment the amount on which sales tax
has been calculated. For
example, a $50 ticket for participating in a charity golf tournament might
list the cost of the round of golf at $19.05, Nebraska Sales tax at $.95,
and the contribution at $30.
Auctions:
When
an affiliated fund sells donated items, Nebraska and applicable local
sales tax must be charged on the total amount paid for the item (which is
considered the fair market value). Donors
should be given a receipt showing the name of the affiliated fund, date
and location of the charitable contribution, a description of the
property, and the sales price of the item.
For additional information, see Internal Revenue Service
Publication 526, Charitable Contributions. To receive a copy of this
application contact the Internal
Revenue Service or submit your request, name and address here.
Lotteries
and Raffles:
Affiliated funds of the Nebraska Community Foundation are
prohibited from using the Foundation’s name, legal status and federal
identification number in association with fundraising efforts by
affiliated funds using lotteries, raffles, keno and/or pickle cards.
This policy, however, does not preclude the Foundation or its
affiliates from accepting charitable donations from an organization that
has raised funds using these methods (Board of Director’s Resolution
dated 1/28/2000).
Collection of Sales Tax
Affiliated funds are responsible for collecting sales tax according to the
requirements noted above.
These taxes can be filed with the state directly under your own
sales tax ID or through the Nebraska Community Foundation’s sales tax
ID. Application
for your own sales tax permit is made on a Nebraska Tax Application,
Form 20.
The fee for each permit is $10. To receive a copy of this form,
contact the Nebraska
Department of Revenue or submit your request, name and address here.
If
you would like the Nebraska Community Foundation to file sales tax for
you, please provide records of all sales and taxes collected and a
disbursement form authorizing payment of the sales tax owed from your
affiliated fund account with the Foundation.
Sales tax collected by affiliated funds of the Nebraska Community
Foundation are remitted on a Nebraska and City Sales and Use Tax
Return, Form 10.
For Nebraska Tax Assistance, contact your regional office or call
toll free 1-800-742-7474.
For a copy of this form, contact the Nebraska
Department of Revenue or submit your request, name and address here.
Charitable Tax
Deductions
Donors
contributing to affiliated funds of the Nebraska Community Foundation are
eligible for charitable tax deductions on their federal income taxes.
Generally, donors can deduct contributions of money or property for
the use of affiliated funds as long as the contribution is made to the
fund and not set aside for use by a specific person or business.
If
a donor receives a benefit as a result of making a contribution to an
affiliated fund, only the amount of the contribution that is more than the
value of the benefit received
can be deducted as a charitable donation.
Donors who pay more than fair market value for merchandise, goods,
or services sold by an affiliated fund to raise money, receive a
charitable tax deduction only on the amount that is more than the value of
the item being sold. For the
excess amount to qualify, it must be paid with the intent by the donor to
make a charitable contribution. (See Donations which provide benefit to
the donor above.)
If
property is given, donors can deduct the fair market value of the property
at the time of the contribution. In
the case of items donated for an auction, the amount bid by the highest
bidder can be used for the fair market value.
For
detailed information on charitable tax deductions, please refer to the
Internal Revenue Service Publication 526, Charitable Contributions.
This publication can be ordered by calling 1-800-827-3676 or
submit your request, name and address here.
You can access the IRS on the Internet at www.irs.gov.
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