Agency: Division of Taxation
Contact Dept.: Tax Services Branch
Tel. No.: (609) 292-5994
Fax No.: (609) 989-0113
Public Schools (K-12)
Private Schools (K-12)- Exempt
School Groups (e.g., clubs, bands, teams)- Exempt
Other parent groups- Not Exempt
Church Groups- Exempt
Youth Sports League- Exempt
501 (c)(3) organizations- Exempt
501 (c)(6) organizations- Not Exempt
Other (specify): Veteran's Organizations - Exempt (NOTE: The exemption applies only if the organization is either a govermental entity or has completed the REG-1E and has been issued an ST-5 from the Division. )
1a Are local sales and use taxes in your State applied to these groups in the same manner as State sales and use taxes are applied to these groups?N/A
1b Please set forth any comments including a list of groups not listed above whose fundraising activities are exempt from sales and use taxation in your State.
Organizations whose fundraising sales are exempted from the tax are those that have applied for and been granted a Sales and Use Tax Exempt Organization Permit. Qualified organizations include 501(c)(3) type nonprofits and volunteer fire and rescue squads.
Candies and Confections
Cookies and Other Baked Goods- Exempt
Cheese Products- Exempt
Meat Products- Exempt
Nuts, popcorn and other snack food- Exempt
Other edible items (please identify)- Exempt
Magazine subscriptions- Exempt
Paper products (e.g., calendars, cards
stationery, books, gift wrap)- Not Exempt
Decorative tins, baskets, other containers- Not Exempt
Decorative novelties (mugs, ornaments)- Not Exempt
Sundry items (please specify item below)- Not Exempt
Clothing only- Exempt
Jewelry- Not Exempt
Plant and seeds- Not Exempt
Other hard good items- Not Exempt
2a Are local sales and use taxes in your State applied to these products in the same manner as State sales and use taxes are applied to these products?N/A
2b Please set forth any comments including a list of products not listed above that are exempt from sales and use taxation for fundraising purposes in your State.The clothing exemption does not include fur items and does not include accessories such as handbags, wallets, umbrellas, etc. Beverages are included in the food exemption except for carbonated beverages.
Limits on number of fundraiser events per year
Limits on duration of fundraisers
An exempt organization is not considered to be engaged in a trade or business in substantial competition with privately operated nonexempt business entities (taxable sales) to the extent sales are made by such organizations through fundraising events or activities which are of relatively short duration and are not held on a regular basis during a calendar year; provided that all proceeds inure to the benefit of the exempt organization.
Also See #8.
An exempt organization must apply for Sales and
Use Tax Exempt Organization status. They must complete form REG-IE and send Articles of
Organization, Bylaws and IRS 501(c)(3) letter. If they qualify they will receive an
ST-5 Exemption Certificate, a copy of which is provided to the
vendor to document an exempt purchase.
The only products exempt in fundraising sales are those products specifically exempted in all sales by the Sales and Use Tax Act. This includes clothing and most food except candies, confections and carbonated beverages. Also magazine subscriptions are tax exempt.
The company distributing goods to the fundraising group. When purchases for fundraising purposes are made of taxable items by certain school affiliated groups that are not exempt organizations and are not registered to collect sales tax, such as school parent groups, sales tax must be paid to the vendor who is responsible for collecting and remitting the tax. The subsequent resales of these items by the groups or students which are conducted for occasional fundraising purposes and not through a shop or store would not be subject to the tax.
Price paid by fundraising group to distributor. In instances as outlined in question #3 the tax would be based on the price paid by the fundraising group to the distributor.
An organization, such as a private school or PTA, holding a valid New Jersey sales and use tax exempt organization permit may make tax exempt purchases in New Jersey by issuing to the vendor a copy of their ST-5 Exempt Organization Certificate and making payment from the funds of the organization. The exempt organization must be the direct payor for the exemption to apply.
When conducting occasional fundraiser sales the school or PTA (or any of its agents, whether they are members, students, parents, etc.) may sell the items on behalf of the PTA or school without collecting tax if payment is by cash or checks made payable to the PTA or school. If the checks are made payable to the vendor/supplier it is a direct purchase from a nonexempt entity and, therefore, a taxable sale regardless of whether a percentage of the sales revenue is subsequently shared by the vendor with the PTA or school. No exemption can apply if the exempt organization is eliminated as the purchaser/seller. Certain organizations, although nonprofit, do not qualify for sales and use tax exemption status, such as social/fraternal organizations, e.g., parents booster clubs, alumni associations, etc. Their purchases of fundraising items, even if conducted with the students, would be taxable as they would not have a valid ST-5 to issue to the vendor and they cannot use the exempt status of the school. The student/sellers, in this instance, would not collect the tax on their occasional fundraising sales.