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What do I need for tax-free hotel billing?

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What do I need for tax-free hotel billing?

My organization has a 501(c)(3) from the state. It also has a full federal 501(c)(3) status. But when I tried to get tax-free billing for a hotel function recently, they denied it and said I need another certificate other than the one issued that declared the incorporation and the federal number ID. What is this certificate they are talking about?

Section 501(c)(3) is the section of the federal Tax Code that describes tax-exempt charities. You do not get a 501(c)(3) from the state. You may be incorporated as a nonprofit corporation in the state, but incorporation alone does not mean that you are exempt from state sales taxes such as those charged on hotel bills and other purchases of goods or services. You have to apply separately to the state for the state exemption. If approved, most states provide a special certificate confirming that exempt status. 
Standards for exemption vary by state and just because you have a (c)(3) status from the IRS does not necessarily mean you will qualify for state exemption. (See Ready Reference Page; “Act 55 Defines 'Charity' Eligible for PA Exemption.”)
Friday, January 9, 2009

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