Effective January 1, 2008, a qualified charitable institution that submits an application to the Secretary of the LA DOR will be entitled to receive an exemption of Louisiana sales and use tax that the qualified institution has collected on the sale of donated tangible personal property, or items made from such donated tangible personal property. The exemption comes in the form of a restricted refund of the taxes.

A qualified charitable institution is defined as an organization that meets the following standards:

• has qualified for exemption from Federal income taxation under IRC Section 501)c)(3);
• has its principal place of business located in Louisiana;
• spends at least 75% of its annual revenue on job training, job placement, direct employment of or other related community services or support programs for people with workplace disabilities or disadvantages; and
• routinely sells donated tangible personal property or items made from such donated tangible personal property.

The refund must be used exclusively in Louisiana for land acquisition, capital construction or equipment, or related debt service, and/or job training, job placement, employment or other related community services and support program costs.

These qualified charitable institutions must be pre-approved for the exemption prior to being able to keep the sales tax collected as a restricted refund. The DOR has the right to audit these refunds within four (4) year of the date the applicable for exemption is received.

If you would like additional information on this topic or have any questions, please contact the taxdesk@thesaltgroup.com