091.01 Organizations created exclusively for religious purposes will be exempt from payment of the Nebraska sales and use tax after the organization has applied for and received a Nebraska Exempt Organization Certificate of Exemption from the Nebraska Department of Revenue. This certificate assigns the organization an exemption number (05-XXXXXXX) which must be used in claiming its exemption.
091.02 The organization must give its supplier a Nebraska Resale or Exempt Sale Certificate, Form 13, as proof of its exempt status. (Reg-1-014, Exempt Sale Certificate)
091.02A Only the organization issued an Exempt Organization Certificate of Exemption may make purchases to be used by and for the purposes of the organization without payment of sales or use tax. Affiliated or subsidiary organizations, although operating in support of or under the guidance of an exempt organization, may not use the exempt organization's exemption certificate. The affiliated or subsidiary organization must apply for its own certificate. The affiliated or subsidiary organization may or may not qualify for its own exemption.
091.02B The sales and use tax exemption does not extend to a person purchasing property to be given or donated to an exempt organization. For an item to be purchased exempt, the person must donate the funds, and the organization must purchase the item. A retailer donating inventory to an exempt organization is required to pay the use tax on the item donated.
091.02C An organization engaging in construction or repair projects will receive the benefit of its tax exempt status by complying with the provisions of Reg-1-017, Contractors.
091.03 An organization that meets the following criteria will be considered as created exclusively for religious purposes. The specific tenets of a particular religion will not be compared or considered by the Nebraska Department of Revenue when reviewing an application for tax exempt status.
091.03A The organization must affirmatively establish its right to exemption by demonstrating that it is organized and is being operated exclusively for religious purposes. The applicant must also demonstrate that it is organized and operated in accordance with the basic principles of charity. A mere restatement of applicant's corporate charter or a statement of its proposed activities will not suffice.
091.03B Its net earnings cannot be used for private gain or benefit. Upon dissolution, all assets and accumulated earnings must be distributed to an organization exempt under section 501(c) of the Internal Revenue Code.
091.03C Exempt tax status will be granted by the Department only if the applicant's operation and activities are described in sufficient detail to require a conclusion that the organization has met the requirements.
091.04 Each application will be examined by the Department to determine the primary or dominant purpose for which the organization has been created, if that purpose is religious and charitable, and if that purpose is being carried out in the operations of the organization.
091.05 In reviewing applications from religious organizations, the Department may examine certain criteria, including, but not limited to, the following. No single criterion is controlling when making a determination of tax exempt status.
091.05A A distinct legal existence.
091.05B A recognized creed and form of worship.
091.05C A definite and distinct ecclesiastical government.
091.05D A formal code of doctrine and discipline.
091.05E A distinct religious history.
091.05F A membership not associated with any other religious organization or denomination.
091.05G A complete organization of ministers ministering to its congregations.
091.05H Ministers selected after completing prescribed courses of study.
091.05I A literature of its own.
091.05J Established places of worship.
091.05K Regular congregations.
091.05L Regular religious services.
091.05M Schools for the religious instruction of the young.
091.05N Schools for the preparation of its ministers.
091.06 If the Department determines that the applicant is a religious organization, it may have other purposes which are incidental when compared to its predominantly religious purposes or goals. In such instances, the applicant may not satisfy all of the criteria set out above.
091.07 A religious organization must collect tax on sales to the general public or to its members. A religious organization may make the following sales without collecting the tax.
091.07A A religious organization may sell meals at a function of the religious organization. The activity will be considered a religious organization function if it is primarily for the members of organization.
091.07B A religious organization may have one annual sale that is not taxed.
091.07B(1) The sale must be at an activity of the religious organization, but it does not have to take place at the religious organization.
091.07B(2) The sale may last up to three consecutive days.
091.07B(3) The religious organization may have the assistance of an auctioneer at this sale without having to collect the tax on the items sold.
091.07B(4) The religious organization may sell anything it owns at its sale, except a motor vehicle, trailer, or semi-trailer. The items may be new and made especially for the sale, or they may be donated to the organization for the sale.
091.08 Any religious organization may purchase property for resale. They shall issue a Nebraska Resale or Exempt Sale Certificate, Form 13, to its supplier. (Reg-1-013, Sale for Resale-Resale Certificate.)
(Sections 77-2702.09, 77-2703, 77-2704.10, 77-2704.12, and 77-2706, R.S.Supp. 1993. May 14, 1994.)