Important Information On Sales & Excise Tax Reporting
New Monthly Deposit Report Form Debuts
As more states look for new revenue sources and increase their enforcement efforts on existing sources such as sales and excise taxes, AYSO has taken preventative measures to ensure we are following the rules to safeguard our good standing status in each state where we do business.
As a nonprofit organization we often think of AYSO as completely exempt from taxes of any kind, in any state in the country. While this is true for income taxes, it isn’t always true for other obligations such as sales tax. In fact, in some states AYSO Regions are obligated to pay sales taxes on revenue received through concession and merchandise sales as well as other fundraising activities.
As part of this new compliance initiative we are introducing a new version of the Monthly Deposit Report Form (“MDRF”) which is included below. Please begin using it immediately. It’s now more important than ever for Regions to submit their MDRF no later than the 5th of each month so the National Office can comply with state reporting requirements.Sales Tax Memo For RegionsMonthly Deposit FormSales Tax Payment PlanSales Tax WebinarWebinar Information
A webinar below was offered to provide the history behind sales taxes.Frequently Asked QuestionsI thought AYSO was exempt from sales taxes because we are a non-profit?Are there any states where AYSO is exempt for paying sales tax even on fundraising activities?What is the importance of NAP Coding?Do Regions have to file sales tax returns?Should I contact on my own the sales tax agency for my state or local government?Why should I not contact any sales tax agencies on my own?Do these sales tax guidelines apply to Section, Area and Tournament accounts too?Why is this new MDRF form necessary?How is the sales tax paid?Why must the MDRF form be received by the National Office by the 5th of each month?What happens if I don’t submit the MDRF form on time? Don’t we need a special cash register to itemize and add-on any sales tax due for each concession or fundraising sale?Won’t that decrease the net amount of money my Region receives from the sale? What other training resources are available?Will this issue be covered during the 2012 Section Meetings?Is this list of anticipated questions full and complete?Who do I contact if I have further questions?
I thought AYSO was exempt from sales taxes because we are a non-profit?
In general this is true as the majority of our revenue comes from player registration fees
that are almost universally considered exempt from sales tax. Many Regions have other sources of revenue however such as fundraising activities
. Fundraising activities include sales of merchandise such as T-shirts, and concession sales, which some states do consider to be taxable even though AYSO is considered a non-profit charitable organization. Are there any states where AYSO is exempt for paying sales tax even on fundraising activities?
Yes, there are several states where AYSO either has a specific exemption from sales tax or they don’t require sales tax from nonprofit organizations. Those states include: Alaska, Arizona, California, Delaware, Iowa, Montana, New Hampshire, New Mexico, New York, Oregon and Utah. What is the importance of NAP Coding?
Revenues recorded in the following NAP accounts will be taxable in several states; codes 4010 (Merchandise revenue), 4012 (T-shirts revenue), 4024 (Concessions revenue), 4040 (Fundraising Receipts)
. It is critical that deposits are being coded to the proper code to insure accurate tax filings and fees. We have attached a brief description of NAP codes to this memo. Do Regions have to file sales tax returns?
No, the AYSO National Office will file all sales tax and other required state tax forms and returns on your behalf as part of our normal support of your Region. The Sections, Areas, and Regions need to submit their MDRF by the due date and verify that deposits are coded correctly, so that the National Office can file the tax returns on time. Should I contact on my own the sales tax agency for my state or local government?
No! Under no circumstances should you have any direct contact. Instead please contact National Accounting Program Manager Owen Gan at firstname.lastname@example.org
for assistance. Why should I not contact any sales tax agencies on my own?
As a single legal entity, AYSO operates as a single corporation with one tax identification number. Regions setting up their own separate sales tax reporting or communicating directly with a state or local government will cause confusion. As previously mentioned, the National Office will file all sales tax and other required state tax forms and returns on your behalf. Do these sales tax guidelines apply to Section, Area and Tournament accounts too?
Yes, all bank accounts on NAP are subject to sales tax reporting. Why is this new MDRF form necessary?
The new form has all of the known possible categories of revenue subject to sales tax. We need this information to file accurate sales tax returns. How is the sales tax paid?
The National Office will do the calculation, filing and payment for each state. Each Region will then be invoiced separately by the National Office for its portion of the total amount due and paid on its behalf. These sales tax invoices will show up on both the unpaid invoice screen in eAYSO as well as the monthly AR statement. Why must the MDRF form be received by the National Office by the 5th of each month?
This is necessary to meet state sales tax filing deadlines. What happens if I don’t submit the MDRF form on time?
If we do not receive the MDRF by the 5th of each month, we will skip your Region’s sales tax calculation and come back to it the following month. Don’t we need a special cash register to itemize and add-on any sales tax due for each concession or fundraising sale?
No. On receipts you receive from familiar merchants such as WalMart, the actual amount of sales tax due is added to the price of the merchandise resulting in a new grand total. For AYSO, the Finance Department will calculate sales tax due from sales of merchandise and concessions by simply multiplying the appropriate tax rate for your state times the amount of revenue you received from the sale. Won’t that decrease the net amount of money my Region receives from the sale?
Yes it will, but you can minimize this by raising the price of what you are selling slightly to cover the tax that will be due. For example, you may choose to sell T-Shirts for $25 each instead of $20. What other training resources are available?
A comprehensive training program is being developed, beginning with this important memorandum. By the end of November, a recorded online webinar will be available. A downloadable and printable version of the webinar will also be available. The AYSO Management Commission is reviewing all existing lesson plans, manuals and reference books to identify and revise content where needed. Will this issue be covered during the 2012 Section Meetings?
Yes, the regularly scheduled management update session will include a full description of the new sales tax procedures and allow time for questions. Is this list of anticipated questions full and complete?
Probably not, but it covers most of the really important ones we need to focus on right now. There are many different definitions of what is and what is not taxable throughout the various state, county and city governments of our country. Who do I contact if I have further questions?
Please contact the AYSO Controller at Shannon@ayso.org