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It is a status that allows qualified nonprofits to make purchases without paying sales tax, provided they meet state requirements and maintain proper documentation.
Nonprofits usually apply through their state's tax authority, submitting documentation such as their IRS determination letter and completing relevant forms.
No, not all purchases or sales are exempt. Each state defines which goods, services, or transactions qualify for exemption.
Failure to comply can result in penalties or loss of exemption status, so accurate recordkeeping and adherence to requirements are essential.
Sometimes. Some states exempt certain sales by nonprofits, but rules vary and often depend on what is being sold and how often.