Merchandise related to your charitable mission
Projects are allowed to sell merchandise that is related to their charitable mission (for example, the sale of an anthology written by youth in the course of an after-school program) and that serves an educational purpose. The project must charge sales tax for the merchandise that is sold. Please check online for current sales tax rates. Items may be sold online or in-person in the state of California. Projects may not sell merchandise in-person outside of the state of California.
Ordering items for sale, filling orders, and storing and controlling your inventory can be costly and time consuming. If you want to sell merchandise with your project’s logo on it, consider giving it away for a “suggested donation.” The proceeds, less the value of the item, are tax deductible to the donor and represent a much more direct source of support for your project.
Merchandise unrelated to your charitable mission
Community Partners strongly discourages fundraising through the sale of merchandise that is not directly related to your project’s charitable mission and does not serve an educational purpose. Proceeds from sales that are unrelated to your program are subject to unrelated business income tax (UBIT). If you would like to sell merchandise that is unrelated to your charitable mission (for example, selling t-shirts), please discuss this with your program liaison.
Revenue received from sales
If you have discussed the issues related to sales tax and UBIT with your program liaison and the project is going ahead with collecting revenue from sales, you must do the following:
- Track the items sold along with the price and sales tax collected.
- Complete the deposit form.
- Mail the deposit form to Community Partners along with the check or money order and the sales tax total. Or, if the deposit includes cash, deliver it in person.