Fundraising Activities
Tangible personal property sold for fundraising purposes is tax-exempt if the following conditions are met:
- You are not in the business of selling such property.
- All of the salespersons are volunteers.
- The cost of each item is $5 or less.
- The property is not sold at an event where similar property is sold by persons in the business of selling such property.
However, sales of alcoholic beverages and tobacco products are taxable.
Example
The players of a minor hockey league organization sell chocolate bars door-to-door for $5 apiece in order to raise funds for their activities. The sales are exempt.
Charities
Most property and services sold by a charity as part of a fund-raising activity are exempt except in the two following cases:
- the property or services are provided regularly or continually throughout the year, or for a significant part of the year (for example, through a hospital gift shop)
- clients are entitled to receive the property or services regularly or continually throughout the year, or for a significant part of the year (for example, a magazine subscription)
Example
A charity that sells greeting cards during the holidays does not charge tax on the cards, because the sales are exempt.
Admission fees
Admission fees charged by a charity for fundraising events such as dinners, dances, concerts, performances or other similar activities are exempt if a portion of the amount paid constitutes a charitable donation that may be deducted in calculating income tax.
Example
A charity sells tickets for a fund-raising dinner at $200 each. Of that amount, $100 represents a charitable donation for income tax purposes. In this case, the full cost of the ticket is tax-exempt and no taxes should be charged.