Are churches and nonprofit organizations exempt from tax?
Nonprofit entities, churches, and religious organizations are not automatically exempt from paying state sales taxes on taxable goods and services. This is true even if these entities are exempt from the payment of state and federal income taxes. State sales tax must be paid unless some other general sales tax exemption applies. Local option sales tax must also be paid on purchases made in jurisdictions which impose the tax. Purchases made for resale are exempt from all sales tax. In other words, a nonprofit corporation, church, or other religious organization is treated the same as any other private citizen for sales and use tax purposes when purchasing goods and taxable services at retail. However, sales of items to any Iowa private nonprofit educational institution used for educational purposes are exempt. Sales from fund-raising activities are exempt from sales tax to the extent that the proceeds are used for educational, religious, or charitable purposes. However, the gross receip
