Here at Enguard Inc, we have successfully facilitated many non-profit organizations, advising them on how to reduce their overhead expenses by leveraging tax exemptions and deductions. After all, for non-profit organizations, efficient utilization of financial resources is very important, as they don’t have profit streams to rely on.
While working with non-profit organizations, we have observed that the clients that approach us with regards to utility tax exemptions, they all have quite a few things in common.
- Most are not aware that they qualify for utility sales tax exemptions.
- Those who know that they qualify, don’t really know how to apply for the tax benefit.
The lack of information on the subject limits them in their capacity to serve. If you too run a non-profit organization, you are likely to relate with them.
We have compiled this brief guide to help you expand your understanding of utility sales tax exemptions, as applicable in the context of non-profit organizations operating in Indiana.
Utility Sales Tax Exemptions – What are Your Rights?
As a non-profit organization, you can legally claim for utility sales tax exemptions, provided the utility is used to support your organization’s goals and objectives.
You can even claim utility sales tax refunds on previously paid utility bills. However, the process for applying for a refund is different—something that we will review later.
Applying for Utility Sales Tax Exemption – The Prerequisite!
To apply for utility sales tax exemption, you must first secure your organization’s status from the Internal Revenue Service (IRS). You can do so by completing and filing IRS Form 1023. There is another form, Form 1024, designed for state sponsored organizations, fraternal associations and employee associations. Choose a form that best represents your organization’s identity of work.
After you have successfully applied with IRS and received your Federal Determination Letter, you can then proceed with applying for utility sales tax exemption at the Indiana Department of Revenue (IDOR).
Form ST-200 – Applying for Tax Benefit at the IDOR
You will need to fill and submit form ST-200 to apply for utility sales tax exemption. The form can be downloaded from here. Don’t forget to attach a copy of the Federal Determination Letter and utility bill with your form.
How to File for a Refund?
To file for a refund on sales tax paid on previous utilities, you need to complete and submit Form GA-110L. You must enclose all the supporting documents to make a case for your application. However, claims can only be made for the current year and the three previous years.
And that’s pretty much it.
Got any questions about Form GA-110L or the application process in general? Feel free to reach out and our expert utility tax consultants will be happy to serve you.