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Non Profit clubs reselling supplies

Discussion in 'Shooting Related Threads' started by missemucho, Feb 25, 2010.

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  1. missemucho

    missemucho Member

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    Our club is a non-profit and in the past the Board of Directors has been very hesitant to buy reloading supplies in bulk for our members. They're afraid of sales tax and IRS issues if the supplies are resold at a profit. Obviously there are opportunities to make money for the club and increase shooting if we could offer cheaper powder, shot and primers to our members.

    What do other non-profits do? If you're reluctant to go on the public record please feel free to send me a message at the above email address (drop the leading and trailing xx's),

    Thanks,
    John
     
  2. crk

    crk Member

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    If you are an exempt non profit (as recognized in writing from the IRS) there is a threshold of earnings you can have without income types of tax. There is a new "postcard" reporting rule that went into effect in 2008 for 2007 based on the amount you collect in a year (I think it is $25,000 gross receipts). Otherwise the 990 (regular or EZ) needs to be completed.

    But, sales tax collection rules can apply and this is very "state specific" check it out with your state dept of revenue or your club tax advisor

    Its not a big deal to do any of these forms but you need to check it out before you start selling. Your club treasurer should be able to do the sales tax forms. It can be a good service for your members and make a few bucks for the organization, IMO.
     
  3. N. J. BOB

    N. J. BOB Active Member

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    You guys are just begging for trouble..........Talk to your club tax advisor only..
     
  4. School Teacher

    School Teacher Well-Known Member

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    The sales tax issue IMO will need to be resolved as being a non-profit does not relieve you of the resonsibility to collect sales tax and file reports.

    Another issue may be the general liability associated with selling and storing ammunition and reloading supplies. This liability will probably be the responsibility of the club's directors and officers.

    For a large scale operation, it may be worth it to acquire insurance, set up the bookkeepig and train staff. On a small scale, it may be more trouble than the benefits received.

    Ed Ward
     
  5. VNVET

    VNVET Member

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    You need to speak to a tax expert who is familar with your state laws. I would not trust the opinions of anyone other than an expert when it comes to tax law. You can find yourself in serious trouble.

    Jim
     
  6. oldgahchamp

    oldgahchamp Active Member

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    If you are doing this to eliminate sales tax, FORGET IT! If you get caught it will be very expensive for your members and your club. Even if your club is "not for profit, non profit, etc, you are still liable in most states to collect sales tax on merchandise sold. You might better buy in large quantities, pay the tax and hope you can make a few dollars with a small profit added on. Larry
     
  7. 320090T

    320090T Well-Known Member

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    Are you charging tax on your targets?
     
  8. stilltrying

    stilltrying Member

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    The one club I go collectively a number of us ordered shot, wads, primers, and powder for ourselves.We got a fair price from the dealer. We had the items delivered with the order of clay birds. We paid sales tax but each saved money by not driving 50 miles one way and hauling back shot and supplies . If you do it right you can still save money and play by the rules.
     
  9. tom berry

    tom berry Active Member

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    It's no big deal for a Non Profit Club to sell reloading components. A club that I've belonged to for years has been doing it as long as I can remember. It just has to be properly accounted for etc.

    As far as the insurance goes, it shouldn't be a problem. Just tell your agent that you've started a little retail business. I'm guessing your sales will be nominal enough that it will have little to no impact on your premium. It's nothing more than a sporting goods store and INS companies will write those all day long.
     
  10. crk

    crk Member

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    You wont get a 501(c)7 exempt status on "buying power" alone (most gun clubs fall under c7). Get the IRS publication on this and file the form 1022/23 for your club with the IRS if not already done.

    But, as other as said - you need to get the sales tax issue in control too. It is different than a group of guys buying an 8lb keg of powder and splitting it 8 ways at the kitchen table if you are re-packaging or marking it up and re-selling it like a business.

    Dont be afraid of the forms and tax process/collecting sales tax, etc- thousands of not for profit groups deal with it every day. Just do it right. For $199 you can buy Quickbooks and the process is PAINLESS and you can manage your club finances in all aspects from it too. Makes your tax prep person very happy too.
     
  11. SF SGM

    SF SGM Member

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    I am the curator for a 501 c(3) museum and you can make a profit from the resale of merchandise, a lot of 501 orginizations do so. As stated numerous times, sales tax requirements vary from state to state. If you guys decide to do this, I highly recommend to use Quicken Quick Books for Non Profit orginizations. There are several rules concerning how much a non profit can make from various means, the must difficult is from investments as it is over a 3 years period and cannot exceed 33% of your gross income. Most non profit corperations do not have file the 940 if your gross revenue is 25,000.00 or less but once again, this is an average over the past 3 tax years. Just pick up the phone and call the IRS, believe or not, they are pretty friendly and will help non profits all they can..

    Van
     
  12. Smithy47

    Smithy47 Member

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    Our club uses buying large quanities to get better prices for members. We do not make any profit for the club. We pay the sales tax on all the components up front and charge members what it costs us. We do not charge sales tax again, it is paid up front.
    We do the same thing on clay birds. We pay saies tax on the purchase and charge cost for the birds.

    If you want to make a profit for the club then, in our state, you can get a tax number. You buy the components tax exempt and charge tax on every purchase. The state sends you a form at the end of the year to record taxable sales and you must submit what you have collected based on you gross sales. If it is above a set amount then you will have to pay quarterly.

    We use a ledger to record all sales. We also use a sales receipt book and record the number of each sale, with the particulars, in the ledger.
    The sales receipt is included with the receipts turned in at the end of the day (the range chairman takes care of the books).

    For a 501.C7 club you are limited on how much profit you can make without paying income tax on it. You are also limited on how much you can make from non-members (no mor than 15% of gross receipts, etc).

    You need to talk to your tax man and he will set you up and advise you on the direction you should go.

    Good luck! Bob
     
  13. Joe Potosky

    Joe Potosky Well-Known Member

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    re: Are you charging tax on your targets?

    Some states have an exemption on a tax for targets thrown.

    You really have to check with your state on tax requirements...
     
  14. HDLLLIII

    HDLLLIII Member

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    The club I belong to does not make any profit on reloading supplies or any other item the member wants to order. We simply order for the member and hold it for said member till he/she pays for it, we are not reselling, just trying to save all our members a little money. Tax is paid and collected. Might I suggest if you would like to make some profit you hold a raffle for something of interest to most of your members. This simple system works for us. Larry Lockhart
     
  15. shot410ga

    shot410ga Well-Known Member

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    Don't sell the supplies, distribute them. Every one pays up front, then you distribute the products as they arrive. No sales involved. Maybe an upfront handling charge.
     
  16. crk

    crk Member

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    Careful on raffles - that too varies state to state - some require a permit to a true 501(c)3 rather than c7 organizations.

    It sounds bad as we talk about it - it really is not but do the homework to avoid issues later. I too found the IRS to be more helpful than not when setting up a 501(c)3 and also setting up a 501(c)7 in the last two years. I always made record of the name and badge number of the person at the IRS that I spoke with so that I had reference in case something was challenged.
     
  17. Big Heap

    Big Heap TS Member

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    Tony Soprano always dealt in cash. Since most trapshooters don't report trapshooting on their tax reports, keep it simple. "You didn't hear it here."
     
  18. midalake

    midalake Well-Known Member

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    First Catholic Church of the Clay Target..........Problema solved.....

    GS
     
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