In the wake of the June 21, 2018 U.S. Supreme Court decision in South Dakota v. Wayfair most remote sellers, such as email marketing providers, are now required to begin collecting sales tax in certain states.
What this means is you or your organization may start seeing those charges showing up on invoices.
If your organization is a 501(c)(3) you may be exempt, but you’ll likely need to provide your email marketing provider with a copy of your state’s tax exemption letter. Many online service providers don’t require copies of tax-exempt status in order to qualify for nonprofit discounts, as such, you’ll want to reach out and verify.
Disclaimer: This is not legal or financial advice. Given how new these laws are, you should absolutely reach out to a tax attorney or licensed financial professional about specifics.
Most mainstream providers will make a great deal of resource information available. For example, MailChimp has a section on Tax Exempt Organizations and the new sales tax requirements within their documentation about the changes (emphasis added).
Certain charitable, religious, scientific, or educational organizations may be exempt from sales tax. Please understand that not all non-profit organizations qualify for tax exemption. If you currently receive Mailchimp’s non-profit discount, we can’t automatically exempt you from paying sales tax without the proper documentation.
If you believe your organization should be tax-exempt, you’ll need to send the documentation required by your state to Mailchimp. Each state has its own requirements for proof of tax exemption, so be sure you take the time to submit the correct documentation. In general, states don’t accept your 501(c) letter from the IRS as proof of exemption.
MailChimp also provides a handy list of all states with exemptions along with details about how to go about obtaining copies of the necessary paperwork to verify your status. They also include a list of states that generally require nonprofits to pay sales tax:
- Arkansas
- California
- Georgia
- Hawaii
- North Carolina
- South Carolina
In addition to email marketing providers, any online provider you work with may be in a similar situation. When in doubt, ask.
