Sales Tax Exemptions for Churches

Are churches exempt from sales tax when purchasing items? In most cases, probably not.

Perhaps the following questions/answers taken from The Louisiana Department of Revenue website will prove helpful:

Are sales to churches and nonprofit organizations subject to sales tax?

Yes, sales to churches and nonprofit organizations are subject to sales tax unless they are specifically exempted by statute. The designation of tax-exempt status by the IRS provides for an exemption only from income tax and in no way applies to sales tax.”

How do I get a sales tax-exempt number for a non-profit organization?

Non-profit organizations are not generally exempt from sales tax on purchases in Louisiana. The tax exemption applies to income tax for the corporation. For more information on exemptions for nonprofit organizations, see Form R-20125, Sales Tax Exemptions for Nonprofit Organizations.”

According to Page 5 of Form R-20125, Sales Tax Exemptions for Nonprofit Organizations, state statutes previously excluded churches and synagogues from paying sales tax on purchases of bibles, song books, and literature used for religious instruction, but a federal court issued an injunction preventing this exclusion in 2006. This publication states that “[u]nless and until the judicial injunction is lifted, these exclusions cannot be claimed. Churches, synagogues . . . will be required to pay the state sales or use tax on all of their purchases, including those previously excluded from taxation.”

Because this publication appears to have last been updated in 2015, ministry leaders are encouraged to consult with a locally licensed attorney or tax professional regarding whether the ministry is able to receive an exemption from sales tax on any purchases at this time.

Because tax laws can be very complicated, ministry leaders are encouraged to consult with a local CPA or tax attorney who can help them stay in compliance with all local, state, and federal laws.