`(a) Not-for-Profit Organizations- Dues, contributions, and similar payments to qualified not-for-profit organizations shall not be considered gross payments for taxable property or services for purposes of this subtitle.
(OK, so contributions are not taxed, we both agree)
`(b) Definition- For purposes of this section, the term `qualified not-for-profit organization' means a not-for-profit organization organized and operated exclusively--
`(1) for religious, charitable, scientific, testing for public safety, literary, or educational purposes;
`(2) as civic leagues or social welfare organizations;
`(3) as labor, agricultural, or horticultural organizations;
`(4) as chambers of commerce, business leagues, or trade associations; or
`(5) as fraternal beneficiary societies, orders, or associations;
no part of the net earnings of which inures to the benefit of any private shareholder or individual.
(Definition, nothing controversial here)
`(c) Qualification Certificates- Upon application in a form prescribed by the Secretary, the sales tax administering authority shall provide qualification certificates to qualified not-for-profit organizations.
(Not really explained here what these certificates are for. They should reference some paragraph to explain. I assume they are used for paragraph (e) purchases below. Poorly written law.)
`(d) Taxable Transactions- If a qualified not-for-profit organization provides taxable property or services in connection with contributions, dues, or similar payments to the organization, then it shall be required to treat the provision of said taxable property or services as a purchase taxable pursuant to this subtitle at the fair market value of said taxable property or services.
(If church provides a good or service for contribution, then must charge fairtax on fair market value. That makes some sense.)
`(e) Exemptions- Taxable property and services purchased by a qualified not-for-profit organization shall be eligible for the exemptions provided in section 102.
(OK, here is the part that will take pigdog a long time to understand. This exemption is not for "normal course of business" exemptions, despite what pigdog claims. The exemption is for section 102 purchases. What is Section 102 you ask:
`(a) In General- For purposes of this subtitle--
`(1) BUSINESS AND EXPORT PURPOSES- No tax shall be imposed under section 101 on any taxable property or service purchased for--
`(A) a business purpose in a trade or business, or
`(B) export from the United States for use or consumption outside the United States, if, the purchaser provided the seller with a registration certificate, and the seller was a wholesale seller.
(So Churches are exempt only for items they purchase for intermediate or export sales. Not for their normal course of business. Pigdog is wrong as usual and will not admit it for years. He will act ignorant and tell everyone else they are dumb. None of his fairtax buddies will correct him because they don't care that lies are spread to promote it. This is the same old song and dance that has been going on forever on these threads. Fairtaxers make false claims and never correct them. Or in the rare instances they do, it takes literally years.)
"The FairTax taxes non-profits’ sales of goods and services to individuals and their purchases of goods and services that are not sold on to individuals, including capital goods."