Simple when it is purchased from contributions then passed on as charitable gift without a sale occuring.A sale did occur. The Church bought a Bible.
Furthermore, the not-for-profit is expressly exempt from paying taxes in connection with the purchase of goods purchased for furtherence of its charitable activities:They aren't reselling it; they aren't using it to produce, provide, render, or sell taxable property or services; and it isn't a business purpose. The section you quoted only states that the nonprofit, just like a business, doesn't pay the tax if they are going to resell it, but then they have to charge the tax when they do.
A sale did occur. The Church bought a Bible.
A taxfree purchase occurred in the furtherance of the not-for-profit's bona fide business. Thus not taxable under the FairTax provisions of section 102 as referenced by section 706.
They aren't reselling it; they aren't using it to produce, provide, render, or sell taxable property or services
Oh, they aren't giving it away? As in provide such in furtherance of their bona fide business ends engaged in not-for-profit charitable activities?
If the organization is using those Bibles for resale, they must obviously collect a tax on the resale.
If they are handing those Bibles over to the members of the organization for their consumption, then they are required to pay either the tax on their purchase where consumed internally or collect the tax from the individual or share holder receiving the Bible and remit such to the state tax authority.
However if they are merely handing the Bibles out to persons not affiliated with the organization, in keeping with their bona fide business of charitable giving, there is no tax paid on the purchase of those bibles, no tax collected from the recipient of those bibles. The transactions occurring are merely the transformation of a money contribution into a property passed to another as a gift, a oneway transaction from original giver to a recipient of the charity passing through the conduit of the qualified not-for-profit organization.
That is how I read the provisions of HR25, especially in light of the principles of interpretation expressly stating that any ambiguities of interpretations construed in a light favoring the either the powers of the states or of the people, not the powers of federal government to collect whatever tax it can get away with.
If you don't tax nonprofits' non-resale purchases, you set up a huge bias toward nonprofits providing goods and services.
Yep, private charity is favored over government welfare and even business. I can accept that. For the only charity that can work that way is out of the resource freely given in the first place to the not-for-profit organization to be applied to specific ends, charitable works.
When would the consumption of a food pantry handing out sandwiches for free be taxed?
Never because no sale has occurred, any more than I choosing to share the fruits my apple tree with my neighbors without receiving compensation for the gift rendered to them.
What I do with my apples in a one way transaction is not subject to a retail sales tax. No sale or exchange of values has occurred merely the transfer of a gift, likewise estates are not taxed when they pass to another under this legislation. It is after all a retail "sales' tax, not a tax on mere transfer of wealth or property from one person to another outside the context of contractual exchange of value that a sale represents.