Sales Tax–Churches in North Dakota

Occasionally questions arise if churches are exempt from paying sales tax on purchases or if they are obligated to pay sales tax if they sell religious items, religious cd’s or books to their parishioners.  
 
PARISHES REQUIREMENT TO PAY SALES TAX:

Generally, churches are obligated to pay sales tax on purchases, unlike private and parochial schools who are exempt from paying sales tax when purchasing items to be used exclusively in the operation of their school. There is a single sales tax exemption for churches regarding the purchase of certain books such as bibles, hymnals, textbooks and prayer books.
 
PARISHES REQUIREMENT TO COLLECT SALES TAX:

1. Parishes operating a for-profit retail store, regardless of size, is required to have a ND Sales Tax License to collect Sales Tax in accordance with state law.
2. Generally, churches can be granted exemptions from collecting and remitting sales tax, if requested, on sales at one-time events when the entire amount is expended for charitable or religious purposes. Exemption does not apply:

1. if the gross receipts exceed $10,000
2. if the event is held in a public facility
3. if receipts are from regularly scheduled or ongoing activities in direct competition with other retailers.

1.  WHO – Your parish name, address and tax identification number
2.  WHAT – what are you planning to sell
3.  WHEN – date(s) you are conducting the sales or if it is ongoing
4.  WHERE – state if the sales will be at the parish or provide location of the sales
5.  WHY – the purpose of the sales i.e. religious purposes, specific fundraising or charitable purpose

The links below provide more information on churches and sales tax.

• State of North Dakota Tax Commissioner Memorandum

• State of North Dakota Tax Commissioner Guideline

• See page 15 under Exemptions of the North Dakota Century Code on Sales Tax Chapter 57-39.2