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