South Carolina

Sales by non-profits are exempt from sales tax. Structuring transactions to take advantage of this can be done. Purchases are generally taxable unless for re-sale or capped. (Subject to a Maximum Tax.) Purchases by a church of musical instruments, furniture and office equipment are subject to a $300 cap in South Carolina.

North Carolina

In NC, sales by non-profit entities are taxable. The sales tax charged on sales made is not refundable to the nonprofit. All purchases are also taxable; however, NC allows a refund of sales or use tax paid to suppliers or accrued and paid to the State to be refunded every six months. The refund of sales tax also includes sales tax paid by contractors and their subcontractors for repairs or additions to realty.

North Carolina Churches

Churches in North Carolina can recover sales taxes paid every six (6) months from the State, if they are qualified to do so. The Sales Tax Division requires a church to provide a copy of their IRS 501(c)(3) letter or letter from their parent church stating they are an affiliated entity, articles of incorporation and statement of service times in order to register for sales tax refunds. Many churches are not registered to receive refunds and those that are often leave large sums of their money in the hands of the State. Given all churches undertake annual pledge, tithing or giving campaigns, it would seem an act of proper stewardship to insure as much money as possible is recovered for the church's use. Oddly, we have found churches unresponsive to offers of outside assistance to look for recoverable funds. This remains a mystery!