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§ 11-204. Exempt organizations

West's Annotated Code of MarylandTax-GeneralEffective: April 8, 2014

West's Annotated Code of Maryland
Tax-General (Refs & Annos)
Title 11. Sales and Use Tax (Refs & Annos)
Subtitle 2. Exemptions (Refs & Annos)
Effective: April 8, 2014
MD Code, Tax - General, § 11-204
§ 11-204. Exempt organizations
Sales to organizations
(a) The sales and use tax does not apply to:
(1) a sale to a cemetery company, as described in § 501(c)(13) of the Internal Revenue Code in effect on July 1, 1987;
(2) a sale to a credit union organized under the laws of the State or of the United States;
(3) a sale to a nonprofit organization made to carry on its work, if the organization:
(i) 1. is located in the State;
2. is located in an adjacent jurisdiction and provides its services within the State on a routine and regular basis; or
3. is located in an adjacent jurisdiction whose law:
A. does not impose a sales or use tax on a sale to a nonprofit organization made to carry on its work; or
B. contains a reciprocal exemption from sales and use tax for sales to nonprofit organizations located in adjacent jurisdictions similar to the exemption allowed under this subsection;
(ii) is a charitable, educational, or religious organization;
(iii) is not the United States; and
(iv) except for the American National Red Cross, is not a unit or instrumentality of the United States;
(4) a sale, not exceeding $500, to a nonprofit incorporated senior citizens' organization made to carry on its work, if the organization:
(i) is located in the State; and
(ii) receives funding from the State or a political subdivision of the State;
(5) a sale to a volunteer fire company or department or volunteer ambulance company or rescue squad located in the State made to carry on the work of the company, department, or squad;
(6) a sale of tangible personal property to a nonprofit parent-teacher association located in the State if the association makes the purchase to contribute the property to a school to which a sale is exempt under item (3) of this subsection or § 11-220 of this subtitle;
(7) a sale to a nonprofit organization made to carry on its work, if the organization:
(i) is qualified as tax exempt under § 501(c)(4) of the Internal Revenue Code; and
(ii) is engaged primarily in providing a program to render its best efforts to contain, clean up, and otherwise mitigate spills of oil or other substances occurring in United States coastal and tidal waters; or
(8) a sale to a bona fide nationally organized and recognized organization of veterans of the armed forces of the United States or an auxiliary of the organization or one of its units, if the organization is qualified as tax exempt under § 501(c)(4) or § 501(c)(19) of the Internal Revenue Code.
Sales by organization
(b) The sales and use tax does not apply to a sale by:
(1) a bona fide church or religious organization, if the sale is made for the general purposes of the church or organization;
(2) a gift shop at a mental hospital that the Maryland Department of Health operates;
(3) a hospital thrift shop that:
(i) is operated by all volunteer staff;
(ii) sells only donated articles;
(iii) contributes the profits from sales to the hospital with which the shop is associated; and
(iv) is not operated in conjunction with a gift shop or another retail establishment;
(4) a vending facility operated under the Maryland Vending Program for the Blind if:
(i) the facility is located on property held or acquired by or for the use of the United States for any military or naval purpose; and
(ii) a post exchange or other tax-exempt concession is located and operated on the same property;
(5) an elementary or secondary school in the State or a nonprofit parent-teacher organization or other nonprofit organization within an elementary or secondary school in the State for the sale of magazine subscriptions in a fund-raising campaign, if the net proceeds are used solely for the educational benefit of the school or its students, including a sale resulting from an agreement or contract with an organization to participate in a fund-raising campaign for a percentage of the gross receipts under which students act as agents or salespersons for the organization by selling or taking orders for the sale;
(6) a parent-teacher organization or other organization within an elementary or secondary school in the State or within a school system in the State; or
(7) subject to subsection (e) of this section, a bona fide church, religious organization, or other nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code if:
(i) the sale is made at an auction sale; and
(ii) the proceeds of the sale are used to carry on the exempt purposes of the church or organization.
Exemption certificate required
(c) To qualify as an organization to which a sale is exempt under subsection (a)(3) or (5) of this section, the organization shall file an application for an exemption certificate with the Comptroller.
Determination letter
(d) The Comptroller may treat the possession of an effective determination letter of status under § 501(c)(3) or (13) of the Internal Revenue Code from the Internal Revenue Service as evidence that an organization qualifies under subsection (a)(3) or (5) or (1) of this section, respectively.
Partial exemption
(e) For a sale described under subsection (b)(7) of this section that is not otherwise exempt under this section, only that part of the sale price that qualifies for a deduction under the federal income tax as a charitable contribution under the regulations and guidelines of the Internal Revenue Service is exempt from the sales and use tax under this section.

Credits

Added by Acts 1988, c. 2, § 1, eff. Jan. 1, 1989. Amended by Acts 1988, c. 110, § 1; Acts 1989, c. 676; Acts 1989, c. 733; Acts 1994, c. 664, § 1, eff. July 1, 1994; Acts 1994, c. 711, § 1, eff. July 1, 1994; Acts 1997, c. 382, § 1, eff. July 1, 1997; Acts 1997, c. 509, § 1, eff. July 1, 1997; Acts 1998, c. 612, § 1, eff. July 1, 1998; Acts 2006, c. 210, § 1, eff. July 1, 2006; Acts 2006, c. 217, § 1, eff. July 1, 2006; Acts 2006, c. 218, § 1, eff. July 1, 2006; Acts 2009, c. 506, § 1, eff. June 1, 2009; Acts 2010, c. 509, § 1, eff. July 1, 2010; Acts 2010, c. 510, § 1, eff. July 1, 2010; Acts 2012, c. 452, § 1, eff. June 1, 2012; Acts 2012, c. 453, § 1, eff. June 1, 2012; Acts 2013, c. 609, § 1, eff. July 1, 2013; Acts 2014, c. 45, § 1, eff. April 8, 2014; Acts 2017, c. 62, § 6.
Formerly Art. 81, §§ 326, 375.

Editors' Notes

HISTORICAL AND STATUTORY NOTES
2006 Legislation
Acts 2006, c. 210, § 1, inserted subsecs. (b)(6) and (e), related to certain auction sales.
Acts 2006, c. 217, § 1, and Acts 2006, c. 218, § 1, inserted subsec. (a)(8), related to sales to veterans' organizations.
Acts 2006, c. 217, § 2, and Acts 2006, c. 218, § 2, provide:
“SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1, 2006. It shall remain effective for a period of 3 years and, at the end of June 30, 2009, with no further action required by the General Assembly, this Act shall be abrogated and of no further force and effect.”
2009 Legislation
Acts 2009, c. 506, § 1, amended Acts 2006, c. 217, § 2, and Acts 2006, c. 218, § 2, to read:
“SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 1, 2006. It shall remain effective for a period of 6 years and, at the end of June 30, 2012, with no further action required by the General Assembly, this Act shall be abrogated and of no further force and effect.”
2010 Legislation
Acts 2010, c. 509, § 1, and Acts 2010, c. 510, § 1, added subsec. (a)(9).
Acts 2010, c. 509, § 2, and Acts 2010, c. 510, § 2, added subsec. (a)(8).
Acts 2010, c. 509, § 3, and Acts 2010, c. 510, § 3, provide:
“SECTION 3. AND BE IT FURTHER ENACTED, That Section 2 of this Act shall take effect on the taking effect of the termination provision specified in Section 2 of Chapters 217 and 218 of the Acts of the General Assembly of 2006, as amended by Chapter 506 of the Acts of the General Assembly of 2009. If that termination provision takes effect, Section 1 of this Act shall be abrogated and of no further force and effect. This Act may not be interpreted to have any effect on that termination provision.”
2012 Legislation
Acts 2012, c. 452, § 1, and Acts 2012, c. 453, § 1, corrected a reference in subsec. (a)(8); and deleted subsec. (a)(9), which previously had read:
“[(a)](9) a sale to a bona fide nationally organized and recognized organization of veterans of the armed forces of the United States or an auxiliary of the organization or one of its units, if the organization is qualified as tax exempt under § 501(c)(4) of the Internal Revenue Code.”
The abrogation provision contained in Acts 2006, c. 217, § 2, and Acts 2006, c. 218, § 2, as amended by Acts 2000, c. 506, providing for abrogation of that act on June 30, 2012, was deleted by Acts 2012, c. 452, § 1, and Acts 2012, c. 453, § 1, eff. June 1, 2012.
The contingency specified in Acts 2010, c. 509, § 3, and Acts 2010, c. 510, § 3, providing for an amendment of Tax-General § 11-204 upon the abrogation of Acts 2006, c. 217, and Acts 2006, c. 218, was not met. The abrogation provision contained in Acts 2006, c. 217, § 2, and Acts 2006, c. 218, § 2, was deleted by Acts 2012, c. 452, § 1, and Acts 2012, c. 453, § 1, eff. June 1, 2012.
2013 Legislation
Acts 2013, c. 609, § 1, redesignated subsec. (b)(6) as (7); and added a new subsec. (b)(6).
2014 Legislation
Acts 2014, c. 45, § 1, in subsec. (e), corrected a cross-reference.
2017 Legislation
Acts 2017, c. 62, § 6, in (b)(2), substituted “Maryland Department of Health” for “Department of Health and Mental Hygiene”.
MD Code, Tax - General, § 11-204, MD TAX GENERAL § 11-204
Current through all legislation from the 2019 Regular Session of the General Assembly.
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