Organizations in the state of Minnesota that meet specific requirements may be eligible to obtain an exemption from paying tax on donations. If your organization is looking for donations or is planning to solicit for them, it is very important that you become a recognized non-profit in the state before doing so. The Minnesota sales tax emption for nonprofits is available only after you register with the state that you are a non-profit organization.
Getting Exemption for Taxes
To obtain the Minnesota sales tax exemption, you will need to file specifically for this designation with the State Department of Revenue. It may sound like an easy enough process, but there are multiple steps and making a mistake here can cost any organization – no matter what type of good work it plans to do – a lot.
To avoid these complications, work with a nonprofit attorney who can help you to apply for the Minnesota sales tax exemption. You should do this after registering with the Secretary of State and completing your 501c3 application with the IRS. Once you take those steps, you can then apply for your sales tax exemption and likely get it.
The State Department of Revenue will require that you meet several specific steps and provide a significant amount of information about your organization as well as what the charitable mission is for it. Then once you apply and are granted this exemption, you will be able to make purchases that directly impact the organization’s success (aside from any administrative costs) without having to think twice about sales tax. For many of the state’s organizations, this is a large cost saving. Minnesota, sales tax exemption, is not available to anyone. You need to prove you are worthy of it.
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