Get NC E-585 FAQ 2011

North Carolina law does not exempt nonprofit organizations from payment of sales and use tax on items they purchase for use.

Under American tax law, churches are exempt from having to pay federal, state, and local taxes. ... For purposes of U.S. tax law, churches are considered to be public charities, also known as Section 501(c)(3) organizations. As such, they are generally exempt from federal, state, and local income and property taxes.

In short, if an organization, including churches, receives 501(c)(3) exemption status from the IRS it is recognition that they are exempt from federal income and property taxes. ... So it isn't required for your church to apply for 501(c)(3) in order to be tax exempt.

Nonprofits are also exempt from paying sales tax and property tax. While the income of a nonprofit organization may not be subject to federal taxes, nonprofit organizations do pay employee taxes (Social Security and Medicare) just like any for-profit company.

Sales of tangible personal property (including accommodations) by a church or other nonprofit organization are exempt from the sales and use tax. ... Sales of tangible personal property by certain other nonprofit organizations that are exempt from property taxes are exempt from the sales and use tax.

Churches like many other charitable organizations, qualify for exemption from federal income tax under IRC section 501(c)(3). ... By taking certain actions or participating in certain activities, a church can lose its 501(c)(3) status.

Under current law, 501(c)(3) nonprofits pay sales tax when they purchase goods and services in North Carolina. Generally, these nonprofits are eligible to apply to the N.C. ... In most other states, 501(c)(3) nonprofits receive sales tax exemption certificates and vendors do not charge them sales tax at the point of sale.

North Carolina law does not exempt nonprofit organizations from payment of sales and use tax on items they purchase for use.

North Carolina Nonprofit Sales Tax Exemption In some states, your organization is not automatically exempt from state sales tax, even after obtaining 501(c)(3) recognition from the IRS. You must file a separate application in order to receive state sales tax exemption.

Not all 501(c)(3) entities are automatically exempt from sales and use tax. In most states, 501(c)(3) entities have to pay sales tax on their purchases and charge sales tax on the items they sell. However, some states allow certain types of nonprofit organizations a special exemption from sales tax.

Nonprofits are also exempt from paying sales tax and property tax. While the income of a nonprofit organization may not be subject to federal taxes, nonprofit organizations do pay employee taxes (Social Security and Medicare) just like any for-profit company.

Services in North Carolina are generally not taxable, with important exceptions.

Services in North Carolina are generally not taxable, with important exceptions.

Gen. Stat. § 105-164.3. Installation charges by a retailer to a purchaser as part of the retail sale of tangible personal property, certain digital property, and taxable services are subject to the applicable rate of sales and use tax for the item as set forth in N.C.

Traditional Goods or Services Goods that are subject to sales tax in North Carolina include physical property, like furniture, home appliances, and motor vehicles. Prescription Medicine, groceries, and gasoline are all tax-exempt. Some services in North Carolina are subject to sales tax.