Guidance to Local Churches for the 2017 Renewal of Maryland Sales and Use Tax Exemption Certificates
June 20, 2017
Updated: July 10, 2017
Maryland local churches received Renewal Notices in the mail in early June to renew their Non-Profit Sales and Use Tax Exemption Certificates. Applications for renewals are filled out on the Comptroller of Maryland website and they must be submitted by August 1, 2017. Certificate renewals are performed every five years in Maryland.
The graphic below shows how to complete page two of the online sales tax exemption renewal.
Why am I choosing “No” to answer the question, “Does the Organization derive its non-profit status from a parent organization?”
According to 26 U.S.C. 508(c)(1)(a), churches do not have to obtain recognition of 501(c)(3) status by applying directly to the IRS. In other words, churches have 501(c)(3) status automatically and so it is accurate to select “No” for the last radio button. Because churches automatically have 501(c)(3) status, they also do not have to apply for inclusion in the group exemption. Often donors and grantors want (1) evidence that an organization claiming to be a church is in fact a church, and (2) documentation of tax exempt status for their records. The group ruling provides this verification for donors and grantors, which is why the letter is often helpful despite not being needed to obtain 501(c)(3) status.
Instructions for churches that are NOT incorporated
Per the FAQ’s found on-line with the Maryland Sales and Use Tax Exemption Certificate Renewal Application:
Question #8: My organization is not incorporated and is not required to be registered with SDAT. How do I renew my organization’s exemption certificate?
Answer: You must request a paper application be mailed to you by contacting Taxpayer Services at 410-260-7980 or 1-800-MD-TAXES. Once you receive the paper application, you must submit the paper application and a copy of your organization’s organizing documents by mail to:
Comptroller of Maryland
Revenue Administration Division
PO Box 2998 – SUTEC Renewal
Annapolis, MD 21404-2998
Along with the application, the unincorporated churches must also provide their organizing documents. In general, our churches who have not incorporated do not have a set of bylaws specific for their church. If that is the case, then we have a ruling from the legal department at the General Council on Finance and Administration that instructs those churches to provide ¶¶ 243-258 from the Book of Discipline as the organizing documents for this purpose. Download ¶¶ 243-258.
Note: Local churches do NOT need to become incorporated in order to keep their Sales and Use Tax Exempt status.
Similar to the online applications, the paper applications must be submitted by August 1, 2017.
Please contact the Conference Finance Office at 410-309-3400 should you have problems with this application.
- Annual Conference News
- Whereabouts: a United Methodist Travelogue