Why do we have to charge sales tax if we are a nonprofit?

Oh, the question that drives every committee that has started a bookstore to its knees!

First, involve your church's business administrator in helping you understand your state laws. Each state differs on which items are taxable and which are not. While doing this homework, also read up on your state and city regulations regarding retail operations.

In most situations sales tax is due to your city and state if you resell product that was purchased at a non-tax rate. For example, if you bought 20 copies of The Purpose-Driven Life from Zondervan with your wholesale status as a retailer, you didn't pay tax on them. However, when you sell a copy of the book to Joe Black, he is responsible to pay the sales tax due on the book.

You, as the seller, must keep track of the sales tax you collect and pay that amount to the state on a regular basis. States vary on how often you must report these numbers and pay up. Your state laws also determine which items are taxable and which are non-taxable. In many states the selling of Bibles is a non-taxable transaction. Also, if your church produces sermon tapes or other ministry materials, these items might not be taxable.

Remember that good record-keeping is a must-it is your responsibility to protect your church's tax status and to be a good citizen.

Got a question for Betty Bookstore? Write to her at This email address is being protected from spambots. You need JavaScript enabled to view it..