One of the advantages of operating your organization as a nonprofit corporation is that state and federal income taxes, and other taxes such as sales taxes, are typically waived. This is one way that governments encourage philanthropic, educational, research, social assistance and other activities that are not always well compensated in the for-profit sector. Nonprofit corporations that have received exemption from federal income taxes are automatically exempt from Pennsylvania's corporate income tax. You may also apply for a Pennsylvania sales tax exemption for your nonprofit. You do not need to obtain federal nonprofit tax-exempt status in order to qualify for sales tax-exempt status in Pennsylvania.
Make sure your organization qualifies. Pennsylvania law requires that organizations meet several requirements to qualify for a sales tax exemption. Your organization must have a charitable purpose, and operate for the public good rather than private gain. It must donate or offer most of its services free of charge, and benefit individuals who need help. Finally, its activities must relieve the government of some of its burden for providing services.
Gather your documentation. You will need to submit several documents along with your application for tax exemption. These include the articles of incorporation (if your group is incorporated) or organizational bylaws (if not incorporated), which specify that funds cannot be used for private gain if the organization is dissolved or sold. Also, collect the organization's most current financial statement or, if your group is new, a proposed budget. Finally, make a copy of your IRS tax-exempt determination letter if you have one, and IRS Form 990, the nonprofit annual report form, if you have filed this in the past.
File Form REV-72, Sales Tax Exemption Application. Download the form at the Pennsylvania Department of Revenue website. You may also call 800-362-2050 or e-mail firstname.lastname@example.org to request a copy of the application. Mail the completed form to:
Pennsylvania Department of Revenue Bureau of Business Trust Fund Taxes P.O. Box 280909 Harrisburg, PA 17128-0909
There is no filing fee for this application.
Contact the Pennsylvania Department of Revenue if you have questions about the application or whether your organization qualifies for the sales tax exemption. Call 717-787-1064 or search the department's customer service database on its website.