NC Sales Tax

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ralitaco
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NC Sales Tax

Postby ralitaco » Tue Dec 07, 2010 10:28 am

For my brethren in NC & UT, I have a question about Sales Tax.
For what Categories do we break out the sales tax?

Currently I break it out only for BUDGET Reimbursements.
Should I break it out for FAST OFFERING and OTHER: LOCAL...

Here are a couple of scenarios I have had:
1. Other account for an Eagle Scout project - Had a reimbursement request for lumber purchased at a Big Box store. The total included NC sales tax.
(I don't think the tax would be eligible here b/c these Other accounts are not donations. What do you think)

2. Fast Offering reimbursement - Had a reimbursement request come in for groceries purchased at the local supermarket. The total included NC sales tax.
(I am not sure at all here, but am leaning towards being able to break out the tax)

BTW - I emailed LUS and was told in one line: Ok for other.
I am not sure on this reply is correct so I wanted to see how other units handled this.

Thanks,
JIM

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aebrown
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Postby aebrown » Tue Dec 07, 2010 10:47 am

ralitaco wrote:For my brethren in NC & UT, I have a question about Sales Tax.
For what Categories do we break out the sales tax?

Currently I break it out only for BUDGET Reimbursements.
Should I break it out for FAST OFFERING and OTHER: LOCAL...
...
BTW - I emailed LUS and was told in one line: Ok for other.
I am not sure on this reply is correct so I wanted to see how other units handled this.


This issues was discussed at some length in the thread Fast Offering funds and tax. The result after a lively discussion and input from several Church employees was that you follow the simple instructions, which say to report all sales tax paid (in those jurisdictions where you are asked to report sales tax). There are no exceptions for any categories.

I know that may seem counter-intuitive, but if you review that earlier thread, you will see that all the points you mentioned were raised. The result was still: no exceptions.
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crislapi
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Postby crislapi » Tue Dec 07, 2010 1:37 pm

I would add that CHQ will see what category the expense is in: Other, FO, or Budget. If they want to treat it differently, they can.

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aebrown
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Postby aebrown » Tue Dec 07, 2010 2:21 pm

crislapi wrote:I would add that CHQ will see what category the expense is in: Other, FO, or Budget. If they want to treat it differently, they can.


That was true pre-CUBS. I don't know that it is so simple under CUBS. Before CUBS, CHQ could choose to treat the sales tax however they wanted -- all it would affect is the size of the reimbursement transfer for sales tax that happened once per year.

But now we actually categorize the transaction with a portion going to a Budget category and a portion going to Reimbursed Expenses:Utah Sales Tax (for Utah, different subcategories for NC or Canada). So I might categorize a $107 purchase as $100 to Fast Offering:Other and $7 to Reimbursed Expenses:Utah Sales Tax.

Once I have made that decision, if CHQ disagrees with the sales tax treatment, they can't just do it on their internal accounting. They will have to actually make an adjustment, moving that $7 from the tax to the FO category. That transaction will come down to my MLS as a transfer.

So I certainly agree with the basic point that CHQ knows what category(ies) the check was drawn against, and can move the sales tax to another category. I just think it's worthy of note that if CHQ denies the sales tax credit for one or more expenses, we will see an explicit transfer in MLS for each such expense.
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crislapi
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Postby crislapi » Tue Dec 07, 2010 2:32 pm

Alan_Brown wrote:That was true pre-CUBS. I don't know that it is so simple under CUBS. ...

So I certainly agree with the basic point that CHQ knows what category(ies) the check was drawn against, and can move the sales tax to another category. I just think it's worthy of note that if CHQ denies the sales tax credit for one or more expenses, we will see an explicit transfer in MLS for each such expense.

Agreed. I guess I was referring to if they choose to treat it different, they can patch MLS to behave how they desire. For example, if they don't reimburse tax on FO expenses, they could have the system combine category amount and reimbursed tax amount into the category amount before cutting the check, thus reflecting the category is covering the entire amount of the expense.

ralitaco
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Postby ralitaco » Tue Dec 07, 2010 4:07 pm

Thank you both. I did a search and did not see that previous thread, but it did address the same issue. Also, I did not think of checking the WIKI (yes I know I was supposed to look there first before posting)

Because at the top of the WIKI Page there is the following: Content found in this wiki may not always reflect official Church information.
I have a few more questions:

1. Where can I get a copy of the Official Communication Letter: Sales Tax Refund [1999]

2. Is it still in effect today?

3. Is this issue addressed in the Church Handbook of Instructions?

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aebrown
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Postby aebrown » Tue Dec 07, 2010 4:27 pm

ralitaco wrote:1. Where can I get a copy of the Official Communication Letter: Sales Tax Refund [1999]


Unless you can find a ward or stake with a pretty complete file of old letters, I don't know. My guess is that it was sent only to Utah and North Carolina stakes. I doubt that it is in the Official Communications Library, since that seems to contain only letters of more general interest, but I could check with my stake president to be sure.

The two references to the letter in the previous thread were made by Church employees who apparently have access to libraries of older letters that are not generally available outside CHQ.

ralitaco wrote:2. Is it still in effect today?


Most letters remain in effect unless explicitly rescinded, so I would think so.

ralitaco wrote:3. Is this issue addressed in the Church Handbook of Instructions?


As I recall, the Handbook only gives general guidance that laws and procedures vary from state to state and country to country, so leaders should seek guidance from the Tax Administration office on such topics.

I have some sympathy with your desire for additional documentation. But still, I stick with my main point that I made repeatedly in the earlier thread: we are indeed given instructions "to record sales tax with each disbursement" in Utah, NC, and Canada (see Tax reimbursement on the wiki, which is a copy of the official MLS message). Since no exceptions are mentioned, we shouldn't be making any up, and we shouldn't need additional documentation to tell us not to make up exceptions where none are mentioned.
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crislapi
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Postby crislapi » Tue Dec 07, 2010 10:15 pm

I put a call into the church's tax administration office today for something else but asked about this since I already had them on the phone. They couldn't give me an answer but promised to check around and get back to me. I'll post the reply (and document if I get it).

ralitaco
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Postby ralitaco » Sun Dec 12, 2010 10:17 pm

Thanks.
BTW - my Stake clerk said enter the tax for all categories.


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