If you are a nonprofit veterans’ organization that makes sales of merchandise or goods, you are required to register for a seller’s permit. Generally, items you sell are taxable.
This is true whether you buy the items, make them, or receive them as a donation. Items you purchase can be bought with a resale certificate if you intend to resell them. You should not purchase items for use by your group with a resale certificate; instead, you should pay tax to your supplier on these items.
When you sell American flags, if the profits are used exclusively by the organization, sales of the flags are not taxable. However, you should pay tax to your supplier when you purchase flags or materials used to make them.
When you sell “Buddy Poppies” or similar symbolic, temporary lapel pins, the purchase and sale of the items are not taxable when both of the following conditions are met:
The pins are sold or purchased by the Veterans of Foreign Wars or other specified organizations.
The pins memorialize U.S. military veterans killed in foreign wars.
Tax does not apply to your sales of meals and food products when all of the following conditions are met:
You sell the food or meals at a social or other gathering you conduct.
You furnish the meals or food to raise funds for your organization’s functions and activities.
You use the proceeds to carry out those functions and activities.
You should report all your sales on the sales and use tax return. You may claim a deduction for sales not taxable under “Other deductions” and provide a clear explanation (for example, flag sales by nonprofit veterans’ organization).
Property owned by a Nonprofit Veterans’ Organization chartered by the Congress of the United States may be eligible for a property tax exemption (Veterans’ Organization Exemption). Property owned by a qualified organization is not subject to property tax when used by the organization for charitable purposes only, and when the profit earned is not used to benefit a private individual or member of the organization.
Please visit the Board of Equalization (BOE) Veterans Tax Topics for more information.
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