If I am established in Kentucky as a non-profit, and I go to Ohio to purchase something, am I tax-exempt?

Question

I went to a computer store to purchase a computer, and went to a store in Ohio. My non-profit business is based in KY and I was purchasing something for it in OH. The store said it was policy that I have to have Ohio's stamp to be tax-exempt. The manager said quote "Our policy is tougher than other places." Can they do this, I was under the impression that being tax-exempt in KY and federally, I would be okay.

Answer 1

States have different rules. KY can not exempt you from Ohio taxes. If you make purchases in Ohio, you need an Ohio exempt certificate.

Sounds like that computer store had a fairly recent sales tax audit and had to fork over a bunch of money for uncollected sales tax.

Answer 2

The IRS certified you as a non-profit organization. That means your organization is exempt from corporate income tax.

In order to be exempt from paying sales tax (a completely different tax), you need to apply to each state. If they approve your application, they will issue you a sales tax exemption certificate. You would then give a copy of the certificate to the store each time you made a purchase, to prove that your organization does not pay sales tax.

Keep in mind that the certificate is only good in the state that issued it. In other words, Ohio's certificate only applies to goods bought in Ohio or delivered to Ohio.

Answer 3

to be tax exempt in another state you wanna shop from, you usually have to apply for recognition of tax exemption from the other state's tax dept as well

Answer 4

States impose sales taxes without regard to your federal nonprofit status or nonprofit status in another state. A state may require that you be registered as a nonprofit in that state in order for you to avoid that state's sales tax.

So yes, they were properly charging sales tax.