How to claim Sales Tax Exemptions

Modified on 04 December

If your state allows your nonprofit to claim exemption from sales tax on selling taxable items, then you're able to claim sales tax exemptions for the appropriate state(s) in order to prevent charging participant's sales tax.

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 V2 -> Sales Tax Setup).

2) Select the appropriate exemption reason for your nonprofit:

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

4) After enabling the exemption for the state(s), sign your name 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) with the toggled Yes (Enabled Exemption).

Important: Please know this will only enable sales tax exemption for that specific Race. If you have multiple Race and/or events, you must also enable sales tax exemption for the other Race 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 setup 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 (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: I am exempt from paying sales tax, why am I collecting sales tax?

A: Please know that Nonprofits who have certificates of exemption are, by definition, 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 allows claiming of exemption or if it's taxable.

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

A: This will depend on the state you are hosting the event. If the state is a Marketplace state, then we will collect the sales tax and remit to the state on your behalf. If the state is a non-Marketplace state, then it is your responsibility for determining whether to “turn on” sales tax in any Non-Marketplace states where you have a race or event or where you ship any store items sold on our site. For information on determining if your state is Marketplace, refer to the column "RunSigup to collect on your behalf? (Marketplace State)" on our Taxability Matrix. For more information on setting up sales tax for non-marketplace states, see here.