Fast Offering funds and tax

Discussions around using and interfacing with the Church MLS program.
User avatar
aebrown
Community Administrator
Posts: 15138
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

#11

Post by aebrown »

jbh001 wrote:This wasn't your point, but there is an exception. All states except Utah and North Carolina DO NOT enter tax. That's 48 exceptions. And Canada is an exception unto itself (um, no offense intended). :D

It's nice to know someone is carefully reading my posts. But why think so small? There are also exceptions for Fiji, Mozambique, Belize, and every other country outside US/Canada. You could have easily tallied over 200 exceptions. But thanks for keeping me on my toes! ;)
jbh001
Senior Member
Posts: 854
Joined: Thu Mar 13, 2008 6:17 pm
Location: Las Vegas, NV

#12

Post by jbh001 »

Ah, but the policy limited itself to the U.S. and Canada. I guess I should have included Guam, Puerto Rico, and such. ;)
SmithGW
Member
Posts: 99
Joined: Thu Feb 08, 2007 6:42 am

Fast Offering funds and tax

#13

Post by SmithGW »

I have looked at the original instructions sent to stakes and wards in Utah back in 1993. There are no exceptions to the requirement for stakes and wards to pay sales tax in Utah. If there is a sales tax, we pay it, regardless if it comes from budget, fast offering, or other. By recording the amount of tax on the Enter Expenses screen, the Church can gather the amounts and later be reimbursed 100 percent. The only other state in the United States that requires the Church to pay sales tax is North Carolina. I believe the rate of reimbursement there is 50 percent.
User avatar
Mikerowaved
Community Moderators
Posts: 4524
Joined: Sun Dec 23, 2007 12:56 am
Location: Layton, UT

#14

Post by Mikerowaved »

Well, I got the answer from CHQ both from a phone support person and an email response to my query and they both said the same thing. Never put any tax amount for Fast Offering expenses. That box is ONLY to be used for Budget and Other expenses. For Fast Offerings expenses, always enter zero.
So we can better help you, please edit your Profile to include your general location.
User avatar
aebrown
Community Administrator
Posts: 15138
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

#15

Post by aebrown »

Mikerowaved wrote:Well, I got the answer from CHQ both from a phone support person and an email response to my query and they both said the same thing. Never put any tax amount for Fast Offering expenses. That box is ONLY to be used for Budget and Other expenses. For Fast Offerings expenses, always enter zero.

Well, that's fascinating. Thanks for following up on this issue. It certainly raises the question of how such information is to be communicated to all the units in Utah and North Carolina, since it is a change from every printed policy on the topic. If any Church employee is monitoring this thread, it would be nice to hear a response.

However, if that is indeed a blanket policy, we shouldn't have to worry too much about it -- the Church can (and almost certainly does) easily disregard any sales tax from any category besides Budget and Other. Yet clerks could save themselves some time (currently wasted on calculating sales tax on fast offering checks) if the updated policy were published.
User avatar
Mikerowaved
Community Moderators
Posts: 4524
Joined: Sun Dec 23, 2007 12:56 am
Location: Layton, UT

#16

Post by Mikerowaved »

Alan_Brown wrote:It certainly raises the question of how such information is to be communicated to all the units in Utah and North Carolina, since it is a change from every printed policy on the topic.
Agreed. Since MLS is smart enough to add a FO recipient box when FO funds are selected, then IMO they should hide the TAX box at the same time. That would certainly solve the problem.
So we can better help you, please edit your Profile to include your general location.
jbh001
Senior Member
Posts: 854
Joined: Thu Mar 13, 2008 6:17 pm
Location: Las Vegas, NV

#17

Post by jbh001 »

Since our unit is not in Canada, Utah, or North Carolina, I navigated to Edit > System Options > Finances, and unchecked the Enter tax amount on expenses checkbox. Now there is less to explain and train other clerks on. :)
User avatar
aebrown
Community Administrator
Posts: 15138
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

#18

Post by aebrown »

Mikerowaved wrote:Well, I got the answer from CHQ both from a phone support person and an email response to my query and they both said the same thing. Never put any tax amount for Fast Offering expenses. That box is ONLY to be used for Budget and Other expenses. For Fast Offerings expenses, always enter zero.
Here's some additional information on this topic: I raised this question on the wiki and a support person (in the same department, I'm sure, as the person(s) who gave you the above answer) said the following:
There are two Official Communication Letters from 1999 that state that "We encourage you to properly report all sales tax paid" (Emphasis added). There is no reference to whether it is to be paid on Fast Offerings expenses or not. It also states that this is to be recorded only in Utah and North Carolina no other states need to record sales tax. In reading the thread on the forum, I agree with your stance that this should be recorded in the authorized states and in Canada (as GST) no questions asked. We can upload a copy of the letter if needs be, and reference it in this article.
The "thread on the forum" he refers to is this very thread.

It's unfortunate that we get conflicting statements. I'll have to look up the letters, but personally, I'll take an Official Communication Letter over a second-hand report of what a support person said.
User avatar
Mikerowaved
Community Moderators
Posts: 4524
Joined: Sun Dec 23, 2007 12:56 am
Location: Layton, UT

#19

Post by Mikerowaved »

Alan, I just now contacted MLS support again and spoke with a gentleman who was able to explain it so even I could understand. :o

The most common use of Fast Offering funds is to write a check directly to a company or organization in behalf of a member in need. For example, a check is written and sent to Ma Bell to pay for Sis. Jones' phone bill. In this case, Sis. Jones still is obligated to pay the tax on her phone bill and the church is NOT in a position to claim an exemption for it. This holds true for any check written to pay a debt, bill, or obligation in behalf of someone else, which is the case the vast majority of the time Fast Offering funds are used.

The ONLY time the church could claim a tax exemption is if those funds were used at a store where sales tax was directly paid. For example, if Fast Offering funds were used to buy paint and supplies to paint Sis Jones' house, then and only then a tax refund could be claimed on the purchase.

I will modify my previous statement by stating that almost always a clerk should enter zero in the tax line for Fast Offering checks.

If you are still skeptical, please contact MLS support and discuss it at length with them. They are a great group and I truly appreciate them being there.

(As stated before, this currently only holds true for Utah and North Carolina.)
So we can better help you, please edit your Profile to include your general location.
User avatar
aebrown
Community Administrator
Posts: 15138
Joined: Tue Nov 27, 2007 8:48 pm
Location: Sandy, Utah

#20

Post by aebrown »

Mikerowaved wrote:If you are still skeptical, please contact MLS support and discuss it at length with them. They are a great group and I truly appreciate them being there.
Thanks for the explanation. It's certainly plausible, and understandable if it is true. But since I'm not a tax attorney, I don't know if it's true (not your record of what was said -- I trust that completely -- but what actual Church and legal policy is).

The people in Local Unit Support are indeed a great group. But at this point there is certainly no unified position from the Church. What I quoted two posts back was directly from someone in Local Unit Support (I assume it was someone different from the person you talked to).

So is your Support person more accurate than mine? I don't know. On top of that, by coincidence, this very day yet another Church employee posted to the LDSClerks mail list a post about Sales Tax on expenses from the Other account, but then included a broader statement:
When purchases are made with a check from the Other account by units in Utah and North Carolina, the sales tax amount should be entered in MLS, according to the Tax Division at HQ. The Church does apply for a refund of those taxes. The letters cited [the two official letters from 1999] are indeed broad enough to cover all sales taxes paid with Church funds.
So do you record sales tax on all expenses? Two official letters and two Church employees say yes, and it looks like two other Church employees (the ones you've talked to) say no.

I don't see the value in calling Clerk Support on this issue at this point. It's a roll of the dice as to what answer I'll get on this rather technical legal issue. I'm waiting for something officially communicated by the Church to override the officially printed letters we already have. I will request such an official clarification. Until then, I follow the advice in the official letters and record sales tax on all expenses.
Post Reply

Return to “MLS Support, Help, and Feedback”