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Special Notice Concerning Exempt Purchases By Nonprofit Organizations And Governmental Entities

This TSSN is cited in Ruling 92-5; obsoleted in part by SN 95(10)

The purpose of this notice is to restate the Department of Revenue Services' policies regarding tax exempt purchases by a qualifying governmental entity*, and by charitable, educational, or religious organizations which hold a valid Connecticut Sales and Use Tax Exemption Permit (an "E" number) granted by the Department of Revenue Services and to inform retailers and exempt purchasers of a new policy regarding cash purchases by exempt organizations and public schools. Retailers and organizations should review these policies and ensure that they are complying with the Department's procedures.

*A qualifying governmental entity for exemption from Connecticut Sales and Use Tax is defined as the federal government, its agencies, the State of Connecticut and its subdivisions and their respective agencies. Other states' governments and their subdivisions do not qualify for exemption from Connecticut Sales and Use Tax.


An organization holding a valid Charitable or Religious Organizations Exemption Permit or a qualifying governmental entity may purchase taxable goods and services without payment of the Sales and Use Tax provided the purchase is made by the organization or governmental entity exclusively for its own use and the purchase is made with the organization's or governmental entity's own funds. Purchases made for the convenience or use of officers, employees, members or other individuals are subject to the Sales and Use Tax. The organization or the governmental entity must provide the retailer with a properly completed exemption certificate and must pay for the purchase with a check drawn on the organization's or governmental entity's account. A private organization will use a Charitable and Religious Organizations Exemption Certificate (Regulation 15) and a governmental entity will use a Governmental Agency Exemption Certificate.


A Charitable and Religious Organizations Exemption Certificate or a Governmental Agency Exemption Certificate may be used for a single purchase or lease or it may be valid for a continuing line of purchases for up to three years from the date the certificate is issued by the purchaser to the retailer provided the certificate is plainly marked "Blanket Certificate."


An organization or governmental entity may make exempt purchases of goods and services for $10.00 or less using cash provided the purchases are for its own use and are made with its own funds. Such cash purchases cannot be made with a "Blanket Certificate." A properly completed exemption certificate signed by an officer of the organization or by an authorized agent must be presented to the retailer in support of each cash purchase.


The burden of proving that a sale of tangible personal property or service is not a taxable sale at retail is upon the retailer, unless the retailer takes a certificate from the purchaser in good faith indicating that the purchase is exempt from tax. The retailer must retain adequate records in order to support exempt sales. These records should be kept at least three years and must include the exemption certificates. In addition, the retailer should keep the following: sales receipts, purchase invoices, and cash register tapes. A retailer who has a question about the authenticity of the number provided on the Charitable or Religious Organizations Exemption Certificate should call Taxpayer Services for verification.


FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.

Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.

TSSN-42 (New 1/91)