In Sermon, Burlington Pastor Confronts Woman Over Judicial Retention

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38. There is NO Federal property or Sales tax

Thus any exemption granted from the Federal Government is based exemptions from the Taxes the FEDERAL Government imposes and those taxes do NOT include Sales or Property taxes (Outside of DC itself). Thus what is exempt for Sales tax and Property taxes purposes is up to each local and State Government.

You could technically have a non-profit that is exempt under Federal Income Tax law, but be liable for Property taxes and sales taxes. You can also have the opposite, a non-profit exempt from local and state Property and Sales taxes, but be held to be NOT tax exempt for Federal Income Taxes purposes.

Some examples: A non-profit sells a car to non-profit person or organization, the income is NOT taxable income for Federal Income Taxes purposes BUT the non-profit must collect and forward to the state the Sales tax due on the Sale of the car.

Side note: When most people, who are NOT dealers in automobiles, sell they car to a third person, if sold for less then the car was purchased at, no income occurred for Income Tax purposes, but the sale did generate a sales tax event (i.e. the sales tax must be paid). On the other hand, if the car was sold for more then the non-profit paid for it, the difference is income for income tax purposes. Under Federal Law, no income tax is owned on such a transaction for the non-profit, even through the States will still get its sales tax.

Property taxes tend to be exempt under State Law, if the property is NOT used for any profit making activities. If the property is used on profit making activity, properly taxes must be paid, even if no income is actually earned. On the other hand, if the profit making activities do NOT bring the non-profit any income, no income tax is due.

Just pointing out the exemptions are different depending on what is being taxed. Furthermore, Federal Income Tax only applies to income from profit making activities that is actually earned. Donations to non-profits are deductible for Federal Income Tax purposes if given to organization that are non-profit, even if they engage in profit making activities and own property that earns them income.

One other point I was making is a lot of low income people do NOT donate enough to exceed the Standard deductions, thus the income tax deduction is unimportant to them (even if who they are donating to is NOT a non-profit as determined by the IRS, they total donations are below what the Standard Deduction is, thus it is unimportant if the donation was made or not). This happens a lot in regards to people who earn less then Median Income (roughtly $50,000 a year). This is the same population that Romeny attacked with his comment as to the 47% of the population who pay no income tax. The state exempt status of who they are donating to is thus unimportant to them or the IRS (i.e. if the donation is invalid, it is still exempt for it is under the Standard Deduction for the person who made the donation).