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.
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)
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.