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Does a VFW post in MASS. Pay a sales tax on liquor when purchased…

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Does a VFW post in...
Does a VFW post in MASS. Pay a sales tax on liquor when purchased and sold.
Submitted: 2 years ago.Category: Tax
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6/18/2015
Tax Professional: Tax.appeal.168, Tax Accountant replied 2 years ago
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Tax.appeal.168, Tax Accountant
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Based on the resources that I have referenced, it appears that a VFW is required to pay sales tax on meals and liquor. While there is no definitive language stating this straight out. All roads lead in that direction. The following information references federal exemptions, however, sales tax is a state matter and the federal exemption does not apply for the state. SEE BELOW:
Veterans of Foreign Wars National Headquarters has obtained its exemption under a special veterans service organization provision, Section 501 (c) (19). The National Headquarters exemption does not cover other units. In most cases, the Department Headquarters has obtained a “group exemption” (discussed below) that covers Posts in the Department.
If your Post is not covered under a Group Exemption and has not applied for and been granted a separate exemption, you are urged to do so. To obtain a separate exemption, a Post must file an IRS Form 1024. A Form 1024 can be obtained by contacting a local IRS office. VFW Posts should be eligible for exemption under section 501 (c) (19), provided they have properly requested this exemption. Exemption under Section 501(c) (19) offers the most flexibility, because the exemption offers the broadest exempt purposes. Section 501 (c)(19) status may be the only exemption available if your Post operates a canteen. It is highly recommended that you seek exemption under 501(c)(19). To obtain additional information concerning procuring and maintaining tax exempt status for your Post, review IRS Publication 557, “Tax Exempt Status for Your Organization”, or contact your local Internal Revenue Service office. It is also strongly recommended that you consult with an accountant, attorney or other tax professional for advice concerning the appropriate exemption and compliance with IRS requirements.
Group (“Blanket”) Exemptions
You should check with your Department Headquarters to see if it has been issued a group exemption letter that covers your Post. If it has, you are not required to file a separate application for exemption on Form 1024 unless your Post no longer wants to be included in the group exemption letter or is no longer eligible for exemption under the statutory section upon which the group exemption was issued. However, to be included in a group exemption, each Post must authorize the Department Headquarters to include it in the group. The authorization must be signed by a duly authorized officer of the Post and retained by the Department Headquarters for which the group exemption is in effect.
REFERENCE SOURCE:
www.vfw.org/oms/Leadership/02_QM%20Manual/pdfsections/Sec4.pdf
--------------------------
You may also want to refer to the blog at the following link. It is in reference to a VFW being shut down in MA because of failure to pay sales tax on meals and liquor.
http://www.vfwwebcom.org/forum/index.php?topic=7058.0
Let me know if I can be of further assistance to you regarding this matter.
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Customer reply replied 2 years ago
When ourVFW Post purchases liquor from a licensed and approved vender by the state of Massachusetts, the vendor charges the post a sales tax, the when we serve the liquor we are charged another sales charge. It seems that the state collects two (2) sales taxes from the Post
Tax Professional: Tax.appeal.168, Tax Accountant replied 2 years ago
Hello again,
It's not that you are being charges sales tax twice. Following is how sales tax works.
The vendor charges you a sales tax. The vendor is required to report the sales tax that they charged the VFW and other customers to the state.
You sell liquor/meals, you charge sales tax to the patrons. The sales tax that you collect from the patrons is paid to the state. Any business that is required to charge sales tax, completes a sales tax return and pays the sales tax charged to their customers to the state. So you see, the state is not collecting sales tax from the VFW twice, just once, when you file the required sales tax return.
Let me know if this clarifies matters for you.
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