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Hi, Everyone.
This thread is great. Your are all so knowledgable it
makes me happy. Does anyone know what the tax rules are for Canadian shops who want to raise money selling "fancy parts"? Sasha
On Thu, 08 May 2008 10:28:16 -0400 Stuart O Anderson soa@ri.cmu.edu wrote:
Colin's experience is similar to ours. Because our nonprofit status comes from another organization that we're part of, our income is combined with theirs in deciding whether we cross that limit. We do cross it and pay sales tax on all our sales. Being a non-profit means that the organization isn't owned privately or publicly by folks who make a share of the organization's profit - a non profit is still free to pay its employees and charge as much as the market will bear for its goods/services.
From the IRS website, the requirements for tax exemption are at:
http://www.irs.gov/charities/charitable/article/0,,id=96099,00.html
The bit that says what a 501(c)(3) may actually _do_ is below:
The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency.
There's also a section that says you're not allowed to 'inure' (pay) people associated with the organization to excess. So, if you're selling dura-ace brakes on ebay for as much as you can, but using the money to pay your volunteers for their time at a reasonable rate and improve you're shop (both activities being part of your 'charitable purpose') then you're all set.
Stuart
On Thu, May 8, 2008 at 9:40 AM, Colin Dixon, Phoenix Bikes colin.phoenixbikes@gmail.com wrote:
Income from sales is usually not tax exempt income - unlike
donations - so
that may complicate things. and it is a bit dicey to give
something to
someone and then have them give a 'donation' in return. That said, usually states have a level below which you don't
have to file
sales tax. In VA, I believe its $10,000 a year. therefore, If you don't sell over $10,000, you don't need a
license to sell
stuff and don't need to file. If you do sell over, you need to
both register
to sell stuff (can still be a non-rpofit), and to file monthly
to pay sales
tax. Could be a little off on this, but I think this is the gist.
- colin
On Thu, May 8, 2008 at 9:08 AM, Justin Pogge xecax@hotmail.com
wrote:
we have a special display for nicer parts that we want a larger
donation
for. we have a number of parts hounds that come to our shop to
see what new
goodies we have. selling parts like this really helps us out
financially and
lets us have more wiggle room when it comes to people not
having very much
money to donate for the bicycle that they fix up in our shop.
plus, our
mechanics can benefit from these parts by donating to their own
coop and
getting parts for much less than they would at a LBS.
From: bbohs@purdue.edu To: thethinktank@bikecollectives.org Date: Wed, 7 May 2008 23:05:10 -0400 Subject: Re: [TheThinkTank] Fancy Parts
If you want to indulge in profit, I hear you too. Make your
classifieds
intellectual to me, and I'll try to make them open for fair
trade. Let me
know. Thank you for helping out the community, even for
individuals who are
as accomplished as some. Thank you
Brent Bohs
On May 7, 2008, at 10:58 PM, Brent Bohs wrote:
Thank yo man, you seem to understand how this works. I you
have
profitable items, sell them at what you want. Otherwise,
name a price and
let the masses indulge in your success. Let them know. We
can all benefit
from riding and people that help the whole ordeal are saints
to me, man.
You know you are doing so much for others. Give me a shout!
765-418-1272,
if you want to help the biking community more, I'm sure I can
help you out.
We, at this co-op, don't enrich ourselves, but we sure
enrich any biker we
find in free or cheap parts, labor, and well-being, as we are
trying to
promote biking as a safe and justifiable alternative to car
traffic.
Brent
On May 7, 2008, at 5:10 PM, james blesdoe wrote:
HECK NO!!!
You sell them as you see fit. Nonprofit means you can't
enrich your
self, but your organization is supposed to make a profit In
this economy
that is becoming easier all the time -at least at the Bicycle
Kitchen that
is the case.
roll on
Jim
Erik Stockmeier> wrote: Question!
What the heck does everybody's shop do with fancy items of
special worth
to collectors? For example... perhaps you come upon a
donation of half a
dozen 70s unused campi sidepull break sets. Your stock of
breaks is full,
so throwing them in the bin or selling them for 5$ or
shlepping them on a
Roadmaster seems like a waste. Is it ethically ok for a non-
profit to
occasionally indulge collectors as a source of surplus
income? What about
legally for a 501c3? Is it necessary to launder them through
a "buyer" who
sells them at profit and donates the difference?
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