Question

To obtain revenue, your nonprofit sells learning devices to schools (at half price) and, when your building in available, rents it out for baby showers. Discuss any tax implications

Answer 1

Answer:

Non profit Organisation are qualified as exempt from state and federal taxes. this legal status makes it easier for NGOs to operate as non profit organizations, because they do not have to pay tax on the income they received.

In most states entities must pay sales tax on theie purchase and charge sales tax on the items they sell. However some states aloows certain types of NGO organisation a special exemptions from sales tax. The exemption is generally limited to the purchase of iems used in their exempt purpose.

From above provison and rules, The NGO have to pay tax on the revenue received from the selling of learning device to schools (whether it is for half price or full price) because NGO is not using it for exempt purpose. Alos have to pay tax on earning from Renting of building.