A parish that has total sales (by all affiliated parish groups) in excess of $10,000 per calendar year must collect and remit sales tax to the State of Michigan. You do not have to collect sales tax on fundraising items such as pizza kits, door to door candy sales, homemade noodles, bake sales, etc. because these items are not sold for immediate consumption. You do have to collect and remit sales tax on fundraising dinners such as fish fries, spaghetti dinners etc. and if you sell alcohol at an event it is all taxable no matter the amount of sales.
1. What if the parish just accepts donations for the dinner and does not charge anything?
You would be liable for sales tax on the fair market value of the meals served.
2. What if I collect sales tax on the dinners but the gross sales do not exceed $5,000?
If you collect any sales tax you must remit the tax to the State of Michigan no matter what the total of the sales.
3. Does sales tax apply to gambling or charitable gaming?
No but food sales at the event would be taxable.
4. What groups would fall under the parish?
Any parish affiliated organization that falls under the parish federal EIN.
5. Do I have to pay sales tax on other items that we may sell?
Yes, if the parish sells anything at retail such as items at a rummage sale, religious store items, school shirts, hats, etc. then you are required to collect and remit sales tax.
6. How do I remit the sales tax to the State?
If you only have a few fundraisers per year it would be best to use the “Concessionaire’s Sales tax Return and Payment” form 2271. This form must be filled out and sent to the State along with your tax payment within three business days after the event. Another method would be to apply for a Sales Tax License from the State of Michigan and make regular reporting and remittance of sales tax collected on form 165. (Annual filing if total tax liability is less than $750 per calendar year, Quarterly Filing if annual tax liability is between $750 - $3,600 per calendar year, and monthly filing if total tax liability is greater than $3,600 in a calendar year.)
7. Where can I get more information and the proper forms?
All forms are available on the State of Michigan – Department of Treasury Website at the following address: http://www.michigan.gov/treasury
The “Concessionaire’s Sales Tax Return and Payment” form 5089 can be found at: https://www.michigan.gov/documents/taxes/5089_642085_7.pdf
The “Sales Tax, Use Tax, Income Tax Withholding and Michigan Business Tax Estimates” forma and instructions can be found at: https://www.michigan.gov/documents/taxes/78_442440_7.pdf
The “Michigan Business Taxes Registration Booklet” can be found at: https://www.michigan.gov/documents/uia/Employer_Handbook1-14_455893_7.pdf