Current through September 17, 2024
091.01 Organizations created exclusively for
religious purposes will be exempt from payment of the Nebraska sales and use
tax after the organization has applied for and received a Nebraska Exempt
Organization Certificate of Exemption from the Nebraska Department of Revenue.
This certificate assigns the organization an exemption number (05-XXXXXXX)
which must be used in claiming its exemption.
091.02 The nonprofit religious organization
must give its seller a Nebraska Resale or Exempt Sale Certificate, Form 13, as
proof of its exempt status. Section B of this certificate, or an approved
substitute form, must be completed in accordance with
Reg-1-014,
Exempt Sale Certificate.
091.02A Only the
nonprofit religious organization that has been issued a Nebraska Exempt
Organization Certificate of Exemption may make purchases to be used by and for
the purposes of the nonprofit religious organization without payment of sales
or use tax. Affiliated or subsidiary organizations, for example, separately
organized day care centers, youth groups, or vacation bible schools, cannot
make tax exempt purchases using an exempt nonprofit religious organization's
exemption certificate, even if they are operating in support of or under the
guidance of the exempt organization. The affiliated or subsidiary organization
must apply for its own exemption certificate. The affiliated or subsidiary
organization may or may not qualify for its own exemption
certificate.
091.02B The sales and
use tax exemption does not extend to a person purchasing property or services
to be given or donated to an exempt nonprofit religious organization. For these
purchases to be tax exempt, the person must donate the funds to the nonprofit
religious organization, and the nonprofit religious organization must make the
purchase. Any person who removes property from inventory that was originally
purchased sales tax exempt with a resale certificate, and donates the property
to an exempt nonprofit religious organization, must remit use tax on the
property donated. (
Reg-1-035,
Consumption of Untaxed Property)
091.02C An exempt nonprofit religious
organization engaging in a construction or repair project will receive the
benefit of its tax exempt status by issuing the contractor a Purchasing Agent
Appointment, Form 17, and complying with the provisions of
Reg-1-017,
Contractors. If the exempt nonprofit religious organization does not issue the
contractor a Purchasing Agent Appointment, Form 17, prior to the building
materials being annexed to real estate, the exempt nonprofit religious
organization may apply to the Department for a refund of any sales or use tax
paid by the contractor on building materials annexed to real estate in the
project.
091.03 A
nonprofit organization that meets the following criteria will be considered as
created exclusively for religious purposes. The specific tenets of a particular
religion will not be compared or considered by the Department when reviewing an
application for tax exempt status.
091.03A
The nonprofit organization must affirmatively establish its right to exemption
by demonstrating that it is organized and is being operated exclusively for
religious purposes. A mere restatement of the applicant's corporate charter or
a statement of its proposed activities will not suffice.
091.03B The nonprofit organization's net
earnings cannot be used for private gain or benefit unless the use fulfills a
religious or charitable purpose. Upon dissolution, all assets and accumulated
earnings must be distributed to an organization exempt under the Internal
Revenue Code, § 501(c).
091.03C Exempt status will be granted by the
Department only if the applicant's operation and activities are described in
sufficient detail to require a conclusion that the nonprofit organization has
met the requirements.
091.04 Each application will be examined by
the Department to determine the primary or dominant purpose for which the
organization has been created, if that purpose is religious and charitable, and
if that purpose is being carried out in the operations of the
organization.
091.05 In reviewing
applications from nonprofit organizations seeking an exemption certificate as a
religious organization, the Department may examine certain criteria, including,
but not limited to, those listed in Reg-1-091.05A through
091.05N. No single
criterion is controlling when making a determination of tax exempt status.
These criteria include:
091.05A A distinct
legal existence.
091.05B A
recognized creed and form of worship.
091.05C A definite and distinct
ecclesiastical government.
091.05D
A formal code of doctrine and discipline.
091.05E A distinct religious
history.
091.05F A membership not
associated with any other religious organization or denomination.
091.05G A complete organization of ministers
ministering to its congregations.
091.05H Ministers selected after completing
prescribed courses of study.
091.05I A literature of its own.
091.05J Established places of
worship.
091.05K Regular
congregations.
091.05L Regular
religious services.
091.05M Schools
for the religious instruction of the young.
091.05N Schools for the preparation of its
ministers.
091.06 If the
Department determines that the applicant is a religious organization, it may
have other purposes which are incidental when compared to its predominantly
religious purposes or goals. In such instances, the applicant may not satisfy
all of the criteria set out above.
091.07 A nonprofit religious organization is
required to collect sales tax on sales of property by the nonprofit religious
organization unless the sale is otherwise exempt. A nonprofit religious
organization may make the following sales exempt from sales tax.
091.07A A nonprofit religious organization
may sell prepared food at a function of the nonprofit religious organization
without collecting sales tax. The activity is a function of the nonprofit
religious organization if it is primarily for the members of the
organization.
091.07B A nonprofit
religious organization may have one annual sale event that is not taxed.
091.07B(1) The sale must be at an activity of
the nonprofit religious organization, but it does not have to take place at a
location owned by the nonprofit religious organization.
091.07B(2) The sale may last up to three
consecutive days.
091.07B(3) The
nonprofit religious organization may have the assistance of an auctioneer at
this sale without having to collect sales tax on the property or services
sold.
091.07B(4) The nonprofit
religious organization may sell anything it owns at its sale, except a motor
vehicle, trailer, or semi-trailer. The property or services sold may be made
especially for the sale, purchased for the sale, or donated to the nonprofit
religious organization for the sale.
091.08 Any nonprofit religious organization
may purchase property for resale without paying sales tax if it issues a
Nebraska Resale or Exempt Sale Certificate, Form 13, section A, to its seller.
(
Reg-1-013,
Sale for Resale-Resale Certificate). This certificate, or an approved
substitute form, must be issued in accordance with
Reg-1-014,
Exempt Sale Certificate.
091.09
Purchases by employees or members of the nonprofit religious organization using
their own funds are subject to sales or use tax, even if the purchases are made
on behalf of the nonprofit religious organization, and even if the organization
will be reimbursing the employees or members for expenses incurred, including
purchases of prepared food and lodging.
Neb. Rev. Stat. §§
77-2701.24,
77-2703,
77-2704.10,
77-2704.12,
and
77-2706.
July 3, 2013
