How to Claim Sales Tax Exemptions

Modified on 21 April

In many states, there are exemptions available for charging sales tax on your race registration or merchandise sales. These are most often available to nonprofits or government entities. If your nonprofit is eligible to claim an exemption from sales tax on selling taxable items, you can do this in the Sales Tax settings in your dashboard.

There are several steps you must take in order to claim tax exemption. Please follow the steps below:

1) Navigate to your RunSignup or GiveSignup dashboard (Financial -> Sales Tax -> Sales Tax Setup).

2) Select the appropriate exemption reason for your nonprofit:

3) Toggle Yes (Enable Exemption) for the appropriate state(s):

4) After enabling the exemption for the state(s), sign your name at the bottom of the page indicating you are authorized to make such certifications on behalf of this organization.

5) Once signed, click Save Tax Settings to complete the form. Moving forward, all taxable items will no longer be charged sales tax for all state(s) according to the details of the exemption.

Important: Please know this will only enable sales tax exemption for that specific race. If you have multiple races and/or events, you must also enable sales tax exemption, if available, for the other races in their respective states. If the exemption toggle is not available for the state, this means the state does not allow sellers exemptions for nonprofits.

For more information on claiming sales tax exemptions, see our blog post here. For more information on how to setup taxable items, see here.

Frequently Asked Questions

Q: I don't see the option to choose an Exemption Reason. Where can I choose my reason for exemption?

A: If the Exemption Reason is not showing on the Sales Tax Setup page, then your payment account is not set up as a tax-exempt organization OR your state does not allow for sales tax exemptions. If your state allows for exemptions and your payment account is setup incorrectly, there are two options for you:

Setup a new payment account (Financial > Payment Setup > Create New Account) and make sure the funds are paid out to “501c3 and other nonprofit”.
Upload 990 filings and the IRS letter so that our team can change the legal entity type for your existing payment account.

Q: My organization is exempt from paying sales tax; why is our event collecting sales tax?

A: Please know that nonprofits who have certificates of exemption are, in almost all cases, exempt from paying sales tax on items they purchase. However, events on RunSignup/GiveSignup are the seller, not the buyer, and are not necessarily exempt. Please see our Taxability Matrix to determine if your state offers any exemption or what is taxable.

Q: Do I receive the sales tax and remit it to the state or are you collecting and remitting to the state on my behalf?

A: At this point, all states that collect sales tax require "online marketplace sellers," like RunSignup, to collect the sales tax and remit it to the state on your behalf. If you need to prove to the state that sales tax was charged and collected, you can show them the sales tax summary report in the dashboard (Sales Tax >> Sales Tax Reports) and explain that RunSignup, as the marketplace seller, handles this on your event's behalf.