Maintain Non Profit Organizations
- How to apply for a Missouri Sales/Use Tax Exemption Letter
- Important things to remember when completing the application
- Proper use of an exemption letter
- What can I do if the seller will not accept my exemption letter?
- Requesting an updated copy of my exemption letter
- Updating my exemption account
- Renewing an exemption letter
How to apply for a Missouri Sales/Use Tax Exemption Letter
Any social, civic, religious, political subdivision or educational organization can apply for a sales tax exemption by completing Form 1746, Missouri Sales Tax Exemption Application. This form lists the information needed to verify the organization is indeed a tax-exempt non-profit organization.
Important things to remember when completing the application
Description of Organization
Summarize the primary organizational purpose in one or two brief statements. List the main activities of the organization or agency. You must include a description of how the exemption letter will be used, if issued.
The application must be signed by a listed officer in Section Eight of the application.
Obtaining a 501 (c) exemption
A 501(c) is an Internal Revenue Service (IRS) exemption, if you have not received an exemption letter from the IRS, you can obtain Form 1023, Application for Recognition of Exemption, by visiting their web site at http://www.irs.gov/ or call (877) 829-5500. Obtaining a 501 (C) does not guarantee that the organization is exempt for Missouri sales tax purposes, but it does assist the Department in making a determination that the organization qualifies under Missouri statute.
By-laws are the rules or law governing internal affairs of a group or organization. The bylaws should also address what happens to the assets of the organization if it dissolves.
Articles of incorporation
Articles of incorporation detail how the corporation will be operated and its purpose. The articles should also detail how the assets are distributed upon dissolution. You can obtain more information here.
Charter number or certificate of incorporation
This is a number issued by the Missouri Secretary of State's office when a corporation has registered with their office to do business in Missouri as a non-profit corporation.
The financial statement (am I required to have one for three years?)
A financial statement should provide the sources/amounts of income and a breakdown of the expenses of the organization for the past three years.
A three year financial statement is determined by the date of incorporation and/or the date the 501(c) exemption is issued.
The financial statement can be in the form of a spreadsheet, ledger book or you may submit copies of the 990 return (must include all pages). If the schedules are not provided we may write back for a better financial statement that provides this detailed information, which may delay your application.
We do not accept bank statements.
Do not use abbreviations or if you do please provide an explanation of what they stand for.
If the organization has just started (less than 6 months old) a projected budget for one year should be provided. The projected budget must include projected sources/amounts of income and projected expenses for one year.
Proper use of an exemption letter
Exemption letters are limited exemptions issued to various types of organizations that are exempt under the statute. The organization's use of the letter depends on the type of organization and what is permitted by statute.
Exemption letters issued to religious and charitable organizations can be used for their religious, charitable, and educational functions and activities. Civic, social, service, and fraternal organizations may use the exemption letters in their civic and charitable functions and activities. These organizations are exempt from sales and purchases, as long as those sales or purchases are for their exempt functions and activities.
The Missouri Sales/Use Tax Exemption Letter cannot be used for personal purchases. This includes:
- Personal hotel rooms;
- Meals; and
- Other personal items purchased for individual use.
The exemption is only an exemption for sales and use tax purposes. It is not an exemption for excise taxes or other fees and does not document that the organization is exempt from personal property tax. The exemption letter is not assignable or transferable and is only good for the organization whose name appears on the letter.
The exemption letter may not be used to engage in a competitive commercial business that serves the general public, even if the profits are used for your exempt charitable, religious and educational functions. This type of activity requires a Missouri Retail Sales Tax License.
What can I do if the seller will not accept my exemption letter?
The seller is under no obligation to accept a claim of exemption. The seller can be held liable if he/she accepts an exemption that is not in “good faith”. If the vendor does not want to accept your exemption you must pay tax on the purchase or choose another vendor.
Requesting an updated copy of my exemption letter
The seller is required to update their records every five years. To obtain a new copy of your exemption letter you can contact us by phone at 573-751-2836, fax 573-522-1271, email firstname.lastname@example.org or mail your request to: Missouri Department of Revenue, PO Box 358, Jefferson City, MO 65105. Please make sure you provide your Missouri Tax ID Number on all correspondence submitted to the Department.
Updating my exemption account
To update the account a Missouri Tax Registration Change Request, Form 126 can be completed and submitted. The organization can also send a letter providing the updated information to: Missouri Department of Revenue, PO Box 358, Jefferson City, MO 65105 or fax it to 573-522-1271. Please make sure you indicate your Missouri Tax ID Number when corresponding. It is important that the account be kept up to date since we can only provide confidential tax information to those individuals listed on the Missouri Tax Account.
Expired exemption letter
If your exemption letter has expired, the organization must complete a Missouri Sales and Use Tax Exemption Application, Form 1746 and provide the attachments listed on the application.