As a nonprofit, you don’t owe sales or use tax on things you receive as gifts, including items, cash, gift cards or certificates, labor or personnel time.
Donations of cash, gift cards and time
Donors don’t owe sales or use tax when they give cash, gift cards (or certificates), labor or personnel time.
Donations from donors’ resale inventory
Businesses that donate items from their resale inventory generally owe use tax on the donated items. Donors can make donations to you from their resale inventory exempt from sales or use tax only in the following situations:
- Your organization is the Idaho Food Bank Warehouse, Inc.
- Your organization is the Advocates for Survivors of Domestic Violence and Sexual Assault, Inc.
- Your organization has a food bank or soup kitchen and donors give tangible personal property or food to you to grow, prepare, store or serve food.
Note: Donations of motor vehicles and trailers aren’t exempt to food banks other than the Idaho Food Bank Warehouse, Inc.
- Your organization is a nonprofit registered with the Idaho Secretary of State and the donor gives you food or beverages.
- Your organization receives donations of clothing and more than 50% of your activities involve giving away clothing. (You’re a nonsale clothier.)
Note: Donations of housewares a donor gives to a nonsale clothier aren’t exempt.
- Your nonprofit organization is listed in Idaho Code 63-3622O and donors give tangible personal property that will become part of real property.
Examples of exempt inventory withdrawals (donors won’t owe use tax):
- Food and beverages grocery stores and restaurants give to nonprofit organizations
- Shoes, coats and dresses a clothing retailer donates to groups that give away at least 50 percent of the clothing (nonsale clothiers)
- Building materials a lumberyard donates to a nonprofit museum if the materials will become part of real property
Donors must pay use tax directly to the Tax Commission for all other inventory donations.
Both individual and business donors must pay sales or use tax on most items they donate to you. If they haven’t paid sales tax when they bought the item, they must pay use tax directly to the Tax Commission. This may occur when an online seller does not collect and remit sales tax on your purchase or if you buy something in a state without a sales tax.
- If donors already paid sales tax when they bought an item they’re donating, they don’t owe use tax.
- If donors buy an item new to donate and didn’t pay sales tax, they owe use tax on the purchase price. If an item is used and the donors didn’t pay sales tax when they bought it, they owe use tax on the fair market value of the item at the time they donate it.
- If donors were given a gift and then donate that gift, they don’t owe tax when donating that gift.
Note: Donations of vehicles have special rules. When a donor gives a vehicle they received as a tax-exempt gift, they do not owe use tax on the vehicle. See: Donating a vehicle.