Q: Can a local business refuse to accept a Certificate of Exemption (Florida) for a 501c3 nonprofit?
I’m on the Board with a federally recognized 501c3 nonprofit, we have a consumers certificate of exemption for the state (Florida). We have been in operation for over a decade, and use our exemption certificate frequently to buy supplies for the nonprofit.
When I went in to purchase some items for the nonprofit, I presented the business owner with the Certificate of Exemption for the 501c3. The business owner told me that she doesn’t recognize Tax Exemptions and refused to take it.
I had been under the impression that the tax exemption was compulsory for businesses, as long as the items were (of course) paid for by the nonprofit and used by the nonprofit. Which they always have been.
I could not find any help online with my question. Any advice would be appreciated. Thank you.
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A:
Based on the information provided, it appears that the business owner may be misunderstanding their obligations when it comes to accepting a valid Florida Certificate of Exemption for a 501(c)(3) nonprofit organization.
According to the Florida Department of Revenue, a properly completed Florida Consumer's Certificate of Exemption relieves the selling dealer or vendor from the responsibility of collecting sales tax on non-taxable sales made to the certificate holder, provided the sales are made in strict compliance with the exemption certificate.
If the Certificate of Exemption is valid and the purchases are made on behalf of the 501(c)(3) organization for its exempt purposes, the business should accept the certificate and not charge sales tax on the transaction.
Here are a few steps you can take:
1. Politely explain to the business owner that as a 501(c)(3) organization with a valid Florida Certificate of Exemption, your purchases for the nonprofit are exempt from sales tax.
2. Provide the business owner with resources from the Florida Department of Revenue that explain the rules surrounding Certificates of Exemption.
3. If the business owner still refuses to accept the Certificate of Exemption, you may want to consider contacting the Florida Department of Revenue for further guidance or to report the issue.
4. As a last resort, you might need to take your business elsewhere if the owner continues to refuse to acknowledge your organization's tax-exempt status.
Remember to always ensure that the purchases made with the Certificate of Exemption are for the exclusive use of the 501(c)(3) organization and not for personal use by any individual.
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