New food order system--how to maintain ward's tax exemption?

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nrajeff
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Joined: Thu Dec 08, 2011 10:40 am
Location: WV, USA

New food order system--how to maintain ward's tax exemption?

Postby nrajeff » Tue Dec 11, 2012 12:29 pm

Our ward (in the eastern half of the U.S.) has switched its system of acquiring food for the needy, and I, as ward clerk, am unsure how to keep the ward from paying sales tax on the food it purchases.

Background
:The old system involved placing orders to the Bishops' Storehouse, and each month a truck would deliver the orders to several wards in the stake, where each family's order would be assembled and distributed. To my knowledge, the cost of this food was not charged to the ward. However, when there was an "emergency" request for food in between those monthly deliveries, the bishop or his designee would have to purchase food and then get reimbursed from the ward's "Budget: Fast Offerings--Food" account. Since these emergencies were rare, I never thought about the sales tax that the ward was paying in these cases.

Now: Apparently the "monthly delivery" system was deemed not cost-effective for our area, so we have replaced it with the system we were only using for emergency food purchases. Now ALL the ward's disbursements of food and other necessities that used to normally come from the Bishop's Storehouse, are being purchased by the bishop's designee (usually a RS presidency member) from local supermarkets, and then reimbursement is made from the ward's Fast Offerings account.

The Problem: My wife pointed out to me that the ward is paying sales tax on these purchases, and over a year's time that is substantial. The ward has a tax-exemption number that it uses when making "unusual" purchases such as contracting a business for a ward activity. I am told that supermarkets are able to enter a charitable organization's tax-exemption number at the checkout line, rendering the purchase tax-free.

The questions:
1. Do any of you have experience with this setup, and do you know whether our ward should be using its exemption number for every food purchase?
2. How about for each and every purchase of any kind, including all those "normal" purchases the ward members make and request reimbursement for (such as refreshments for the Young Women In Excellence program)?
3. When the RS goes to the supermarket to fill the "food orders" they are usually buying food for several families, and make one large purchase, and later separate the food out for each family who has requested food assistance. But MLS is only set up to enter ONE family's name when entering "name of member receiving assistance." What is the best thing to do here?

Thanks for any info.

Gary_Miller
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Location: Emmett, Idaho

Re: New food order system--how to maintain ward's tax exempt

Postby Gary_Miller » Tue Dec 11, 2012 3:20 pm

3. When the RS goes to the supermarket to fill the "food orders" they are usually buying food for several families, and make one large purchase, and later separate the food out for each family who has requested food assistance. But MLS is only set up to enter ONE family's name when entering "name of member receiving assistance." What is the best thing to do here?
The best way would be to do an individual purchase for each family that way you would have receipts to attach to the authorization.

Or

You could make a copy the receipt for each family marking the items per family and then attaching the copied receipts to each authorization.

jdlessley
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Re: New food order system--how to maintain ward's tax exempt

Postby jdlessley » Tue Dec 11, 2012 3:29 pm

nrajeff wrote:1. Do any of you have experience with this setup, and do you know whether our ward should be using its exemption number for every food purchase?
While we are not using this method of food purchase, all purchases under the umbrella of the Church should be made as a tax exempt purchase when possible.

nrajeff wrote:2. How about for each and every purchase of any kind, including all those "normal" purchases the ward members make and request reimbursement for (such as refreshments for the Young Women In Excellence program)?
You should be using whatever process is required to make purchases tax exempt when possible or feasible. This varies from state to state in the US. But here in Texas there is a tax exempt certificate that is presented to the retailer/vendor at the point of sale. This certificate is nothing more than a state provided form that identifies the Church as the tax exempt purchaser.

nrajeff wrote:3. When the RS goes to the supermarket to fill the "food orders" they are usually buying food for several families, and make one large purchase, and later separate the food out for each family who has requested food assistance. But MLS is only set up to enter ONE family's name when entering "name of member receiving assistance." What is the best thing to do here?
This may require totaling the cost for each recipient from the store receipt. It is more work but the amount should be entered for each recipient. Even the bishops' storehouse provides the total cost of items for each recipient in the report to the bishop - or at least they do in our area.
JD Lessley
Have you tried finding your answer on the LDS.org Help Center page or the LDSTech wiki?

nrajeff
New Member
Posts: 11
Joined: Thu Dec 08, 2011 10:40 am
Location: WV, USA

Re: New food order system--how to maintain ward's tax exempt

Postby nrajeff » Tue Dec 11, 2012 3:36 pm

Thanks to Gary and jdlessley for the advice! I plan to run it by the bishop for his consideration.


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