Income-tax exemption and sales-tax exemption are different things
In most cases, yes — supporters pay any applicable sales tax when they buy from your store. The confusion is understandable, because "tax-exempt" sounds like it should cover everything. It usually does not.
When the IRS recognizes a nonprofit as tax-exempt, that recognition concerns federal income tax: the organization generally does not pay income tax on revenue related to its exempt purpose. Sales tax is a separate tax, administered by states and local jurisdictions under their own rules, and an organization's federal status does not automatically exempt anyone from it.
The two exemptions work differently:
- Income-tax exemption comes from federal recognition of the organization and concerns the organization's own income.
- Sales-tax exemption, where it exists, is granted state by state, requires its own documentation, and generally covers purchases the organization itself makes — not purchases individual supporters make from the organization's store.
A supporter buying a shirt from your merch store is making an ordinary retail purchase, and that purchase is generally taxable.
What happens at checkout on your store
You do not need to work any of this out yourself. On a Print Your Cause store, any applicable sales tax is calculated automatically at checkout, based on transaction details such as the shipping destination. Supporters see the amount, if any, before they place their order.
Tax does not change how your pricing works. Your organization sets the final sales prices and makes 100% of the difference between item cost and sales price; any applicable tax is calculated separately at checkout rather than coming out of the prices you set. For more on how pricing and profit work, see our pricing page and FAQs.
Orders your organization places itself
Direct or bulk purchases made by the organization itself may be treated differently depending on your state's rules, the documentation involved, and how the items will be used. If your organization is planning that kind of purchase, our bulk order page explains how bulk printing and shipping work.
This guide is general information, not tax or legal advice. Sales-tax rules vary by jurisdiction and change over time; for questions about your organization's specific situation, consult a qualified tax professional. For the federal side of the distinction, the IRS explains tax-exempt status for charities and nonprofits.
