Charitable & Non-Profit Organization Fund Raising Activities

(Bulletin NO. 024- issued June 2000)

Summary

EXEMPTION ON SALES BY CHARITABLE AND NON-PROFIT ORGANIZATIONS

Charitable and non-profit organizations (hereafter referred to as charities) are not required to collect RST on the sale of goods and services (unless tobacco or alcoholic beverages are sold) if all of these conditions are met:

• The sale is not publicly advertised.
• The sale is not in competition with sales made by a vendor who holds a valid subsisting registration certificate issued by the Minister.
•  The sale is not of a commercial nature

WHAT IS CHARITABLE OR NON-PROFIT ORGANIZATION?

A charitable organization is an organization that is registered as a charity under the Income Tax Act (Canada). An organization is considered to be "non-profit" if it is organized and operated for a purpose other than making a profit.

HOW DOES THE TAX APPLY TO FUND RAISING SALES?

• Where goods and services are sold by a charity, and the sale meets all the conditions listed above, the sale is not taxable. However, the charity must pay tax on its purchase price of the items sold that are otherwise taxable.
• Where a charity gives away taxable goods/services with the expectation of receiving a donation, the donation is not subject to tax but the charity is required to pay tax on it's purchase price of the goods/services given away.
• Sales of food and beverages by schools, community clubs or charities are tax exempt if all of the previously mentioned conditions are met.

GOODS DONATED TO CHARITIES

Charities are generally not required to pay sales tax on goods/services donated to them for their own use or for a raffle. However, if the item is subject to tax, the donor must pay the tax on the value of the item.

REGISTRATION REQUIREMENTS

Generally charities do not need to be registered for RST purposes, except when:

• Goods are regularly purchased from out of province suppliers who are not registered to collect tax in Manitoba.
• Activities include sales that are of a commercial nature and subject to tax.
• Tobacco or liquor products are being sold.
• Charities that are registered must collect and remit tax on all their sales of prepared foods, snack foods, confectionery and other taxable goods.

This bulletin is intended to serve as a guideline and is not all-inclusive. For further information contact Manitoba Finance.

Taxation Division - Brandon
Westman Regional Office
Manitoba Finance
349, 340 - 9th Street
Brandon, Manitoba  R7A 6C2
Telephone: 204-726-6153
Fax: 204-726-6763
Toll-free (information): 1-800-275-9290
E-mail: MBTax@gov.mb.ca