Not-for-Profit Organizations Subject to New Sales Tax Requirements

Recently enacted state legislation requires payment of sales tax on certain items sold by exempt organizations . The NYS Department of Taxation and Finance ( DTF ) has issued a memo on this change , posted at  http://www.tax.state.ny.us/pdf/memos/sales/m085s.pdf

Effective September 1 , 2008 , not­for­profit charitable , educational , and religious organizations are required to collect state and local sales and use tax on their retail sales of : ( 1 ) lease or rental of tangible personal property ? ( 2 ) utility services ? ( 3 ) service to real property ? and ( 4 ) tangible personal property where the sale is made by remote means . Sales of food and drink , tangible personal property and parking services made from a shop , store or other establishment by these exempt organizations remain subject to tax .

According to DTF , any exempt organization that makes any of these sales is required to register for sales tax purposes and obtain a Certificate of Authority , if it has not already done so . The DTF memo noted above includes registration information . NYAHSA is currently seeking further clarifications on how this new law may apply to certain types of transactions our members engage in , and we will keep you informed as we receive updates . We also encourage members to consult with their accounting firms on this issue .