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Grex > Coop10 > #90: Cyberspace Communications, Inc. Finances Through February 28th, 1998 |  |
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aruba
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Cyberspace Communications, Inc. Finances Through February 28th, 1998
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Mar 7 05:00 UTC 1998 |
Here is the treasurer's report on Cyberspace Communications, Inc.
finances through February 28th, 1998.
Beginning Balance $2,302.94
Credits $615.00 Member contributions
$17.00 Grex Store proceeds
$1.02 Sales Tax collected
$22.98 Miscellaneous contributions
$12.00 Silly hat fund contributions
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$668.00
Debits $60.00 Pumpkin Rent for March
$83.00 Electricity for February
$20.00 Innovative Concepts phone line
$477.76 Phone Bill
$168.31 Sales & Use Taxes paid to Michigan
$14.51 Bank service charge
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$823.58
Ending Balance $2,147.36
Our current balance breaks down as follows:
$1,968.24 General Fund
$65.00 UPS Fund
$97.86 Silly Hat Fund
$1.02 Sales tax collected
$15.24 Use Tax owed on $253.95 worth of mail-order purchases
The Grex Store activity looks like this:
Cash Stock
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Beginning Balances: ($273.60) $413.00
$17.00 <-- Items sold <-- ($8.50)
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Ending Balances: ($256.60) $404.50
We had one new member in February (gada). We are currently at 93 members,
88 of whom are paid through at least March 15th. (The others expired recently
and are in a grace period.)
I have several things to say about this month's report:
1. We would have broken even but for the unexpectedly large Use Tax we paid.
This shouldn't really have been unexpected, I guess, but it caught me off
guard. From now on I'll keep track of how much we owe. (If we become a
501(c)3 non-profit, we won't owe any at all.) See coop item 88 for a
gruesomely detailed account of our taxes.
2. I have no idea why the bank service charge is so high. I guess I'll call
and try to find out.
3. The phone bill is about $50 higher than expected because the "Mandidory
Charge per FCC order" increased by $14.62 at the beginning of the year,
and Ameritech's billing department being the well-oiled machine that it is,
we are paying for both January's and February's increase on this bill.
Also MCI was going to start charging us a minimum amount for having them as
our long distance carrier, so I had Ameritech switch our LD carrier to
"none", which incurred $10.10 in charges, plus a charge for *having* no
carrier. Sigh. I expect next month's bill (and subsequent bills) to be
about $30 cheaper than this one.
Thanks to everyone who contributed in February:
arthurp, bruin, carl, carson, coyote, danr, gada, krj, mcmud, mitton, quail,
raheim, snow, stern, one anonymous donor, and the Gathering of Grexers, who
contributed the surplus of their bill to the Silly Hat Fund.
Thanks!
If you or your institution would like to become a member of Grex, all it takes
is $6/month (or $60/year). Send money to:
Cyberspace Communications
P. O. Box 4432
Ann Arbor, MI 48106-4432
If you pay by cash or money order, please include a photocopy of some form
of ID. I can't add you to the rolls without ID. (If you pay by personal
check, we consider that a good enough ID.) Type !support for more info.
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| 39 responses total. |
rcurl
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response 1 of 39:
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Mar 7 06:16 UTC 1998 |
Becoming a 501(c)3 will not save you sales tax exemption unless you
apply for that separately, and it is tougher to get than to get 501(c)3.
The state applies its own standards of what "charitable" means.
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aruba
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response 2 of 39:
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Mar 7 07:15 UTC 1998 |
View hidden response.
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aruba
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response 3 of 39:
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Mar 7 19:08 UTC 1998 |
#2 was unnecessarily frosty, which was uncalled for and I apologize. When
I called the Sales, Use, and Withholding Taxes Division of the Michigan
Department of Treasury, the woman I spoke with told me that as soon as we
obtain 501(c)3 status we are eligible to stop collecting sales tax, provided
our total sales are less than $5000, and that we also need not pay Use Tax.
There is a reference in the booklet that came with our tax return to a
document which should clear up eligibility, and I will order it.
Rane, I know you said you had to argue before a Michigan board in order to
obtain exemption from taxes for a non-profit. Was that exemption from sales
& Use Taxes, or from income tax? How long ago was it? I'm wondering if
perhaps the law has changed since then.
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dpc
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response 4 of 39:
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Mar 7 20:20 UTC 1998 |
Mark, at the February budget meeting you said that you had just received
a $250 check as a contribution. I assume you included that in the
$615.00 of "Member contributions", and that it was from the "anonymous
donor". If I'm right, then did we receive $615.00 - $250.00 =
$365.00 in "regular" member contributions at $6/mo in February?
Or were there other "special" member contributions that month?
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aruba
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response 5 of 39:
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Mar 7 23:32 UTC 1998 |
That $250 non-membership contribution was back in November, Dave - sorry if I
was unclear at the budget meeting. It was from user andrewb. All of the
money I report as "Member Contributions" is payment for memberships. (I used
to call it "dues", but someone complained for some reason I can't remember
now, and I changed.)
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rcurl
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response 6 of 39:
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Mar 8 05:17 UTC 1998 |
We are talking about different things. Apparently the $5000 exemption is
for *collecting* sales taxes, and passing them on to the state. There was
no exemption for *paying* sales tax for items we would purchase, except by
getting a separate Sales Tax Exemption License. Yes, it has been some time
since MKC got our License, so I would be glad to learn if what I am
referring to is still true. Did the person at the Tax Division address
Grex *paying* sales tax after we become a 501(c)3 organization? (MKC's
exemption from paying sales tax is dated 1990, and we have received no
communications indicating a change in the law.)
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aruba
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response 7 of 39:
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Mar 8 08:56 UTC 1998 |
Ah, I see. No, I didn't ask her what it would take to get us out of paying
sales tax on things we buy; I had no idea that was even a possibility. I
guess when we get our 501(c)3 status, we should investigate that.
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dpc
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response 8 of 39:
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Mar 8 15:52 UTC 1998 |
Thanx, Mark!
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rcurl
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response 9 of 39:
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Mar 8 20:17 UTC 1998 |
The license to be exempt from *paying* sales tax is highly valued by
501(c)3 exempt non-profits, and is a common negotiation with vendors.
We recently went through this with Copy Max so that we would be in their
computers as being exempt from sales taxes for copying. Grex also recently
discovered that it had to pay sales tax for a lot of recently purchased
equipment: it would have been nice to have been exempt from that tax.
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aruba
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response 10 of 39:
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Mar 9 08:05 UTC 1998 |
That was mostly Use Tax, since most things we bought were via mail order from
out of state. According to the woman I talked to, 501(c)3's are exempt from
paying Use Tax. I'll get the publication on it, though.
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rcurl
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response 11 of 39:
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Mar 9 18:32 UTC 1998 |
I would be very interested in that. Is an application required to obtain
the exemption? The MKC sales tax exemption certificate says in its
instructions "To buy goods and taxable services without paying a sales or
use tax, present:" <list follows>. That is, sales and use taxes are both
covered by the state sales tax exemption. I wonder if she meant that
501(c)3's are exempt from use tax *after they apply for and obtain
exemption*.
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aruba
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response 12 of 39:
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Mar 10 01:53 UTC 1998 |
Well, it could certainly be that she was misinformed, and we ought to
corroboate her information. I'll let you know when I get the publication
about it.
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albaugh
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response 13 of 39:
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Mar 10 17:31 UTC 1998 |
<please link this to coop>
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aruba
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response 14 of 39:
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Mar 11 06:39 UTC 1998 |
I asked for a link when I entered this item, but the coop fws have been off
Grex for the past few days.
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other
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response 15 of 39:
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Mar 15 06:09 UTC 1998 |
having done quite a bit of purchasing for a 501(c)3 tax-exempt organization,
i can say that in order to avoid paying sales tax, all i ever had to do was
at minimum, give the organization's tax id number, and at maximum, fill out
a form at the place of business where i was purchasing, saying what the
organization was, who i was and what my capacity with the org was, and what
the tax id number was. that's all. i think for one particularly skeptical
retailer, i had to provide a copy of a letter from the irs addressed to the
organization and verifying the tax-exempt status.
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rcurl
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response 16 of 39:
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Mar 15 06:34 UTC 1998 |
That's what the *stores* do, but even at the time we managed to get our (MKC)
sales tax exemption, it was not legal. The stores we applied to would not
accept the form provided by the State declaring our tax exemption. They
also only wanted to know our federal "tax number". The only federal number
a corporation gets - profit or non-profit - is its employer identification
number. The government does not issue a number identifying 501(c)3, or
any other, exempt organizations. So, you are correct, other, but to the best
of my knowledge it is illegal. (For other purposes we have had to provide
the 501(c)3 letter stating 501(c)3 exemption, but not for sales tax...but
even then, it is not legal (to the best of my knowledge) for sales tax
exemption.
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other
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response 17 of 39:
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Mar 17 04:25 UTC 1998 |
perhaps its illegality is of a technical nature and is uncommonly enforced?
that would reconcile my experience with yours...
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rcurl
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response 18 of 39:
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Mar 17 05:59 UTC 1998 |
It appears to be uncommonly enforced. I would be interested in a definitive
determination on this, and aruba is the perfect person to get it!
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scg
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response 19 of 39:
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Mar 17 06:11 UTC 1998 |
Both non-profit and for-profit corporations can generally get out of paying
sales tax by giving a tax id number. The stipulation, at least for the for
profit corporations I've worked for, is that sales tax doesn't need to be
charged when the company buying something is going to resell it and charge
tax on it. If a company is buying something for its own use, rather than for
resale, it does have to pay sales tax. I have no idea what the non-profit
rules are, although I'd been assuming that they are the same.
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rcurl
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response 20 of 39:
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Mar 17 06:20 UTC 1998 |
All commercial firms have a state tax number and buy merchandize tax free
and collect tax when it is sold at retail. Non-profits can do the same
thing, but this is NOT the sales-tax exempt purchasing of exempt non-profits.
Non-profits that become tax exempt for *charitable* reasons do not pay
sales tax or things purchased for their own use, and not for resale. There
is no state tax-exempt number issued by the state for this latter,
charitable-organization, tax exemption.
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other
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response 21 of 39:
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Mar 18 04:39 UTC 1998 |
to clarify, there is only one number the federal government issues to
corporations, and it is sort of analogous to an individual's social security
number. i have seen them only in the format: xx-xxxxxxx
this is what scg and i have been referring to as the tax id number.
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rcurl
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response 22 of 39:
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Mar 18 07:01 UTC 1998 |
That is what I am talking about too. It has nothing to do with being
no-profit, or charitable, or 501(c)3, etc. *Every* corporation has such
a "tax id" (properly called the "employers identification number").
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gibson
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response 23 of 39:
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Mar 19 02:22 UTC 1998 |
And the E.I.N. has nothing to do with sales tax.
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i
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response 24 of 39:
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Mar 19 04:46 UTC 1998 |
Nope, *every* corporation does *NOT* have an EIN. Unless the corporation
will be collecting or paying federal taxes, there's little need for one.
Many states use the EIN (or an obvious derivative of it) as the state
tax ID number (Michigan does), so there is some connection to sales tax.
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