Tax Exemption Status

TAX EXEMPTION STATUS

For questions beyond this information, please contact Treasurer@etxgmc.org

Federal

• According to the United States Internal Revenue Service (the “IRS”), “Churches that meet the requirements of § 501(c)(3) of the Internal Revenue Code (the “IRC) are automatically considered tax exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS” (See IRS Publication 1828).  This ruling applies to (i) all U.S.-based churches that have been accepted as a member of the Global Methodist denomination (the “GMC”) and (ii) federal non-profit status.

• Despite the clear language of the IRC and corresponding IRS Publications, some government agencies and private vendors are requiring proof that the entity is indeed a church meeting the requirements of IRC § 501(c)(3).  While the GMC does not currently have a Group Ruling, it is currently working with the IRS to obtain a ruling that can be utilized by all member churches.

• In the interim, the Treasurer of the GMC has developed a Tax-Exempt Confirmation Letter (the “Exemption Letter”) that can be used to document that your organization is a Church and tax-exempt pursuant to IRC § 501(c)(3).  To request an Exemption Letter, email jpospisil@globalmethodist.org. 

Texas

Churches in the Eastern Texas Conference of the GMC (the “ETXGMC”) were formerly covered under a group ruling for tax-exempt status obtained by the United Methodist Church (the “UMC”).  However, such coverage terminated upon a decision to disaffiliate from the UMC under Paragraph 2553 of the UMC’s Book of Discipline for reasons of conscience. 

§  The Transitional Leadership Council of the Global Methodist Church (the “Council”) applied for and received an Exemption Verification Letter from the Comptroller of Public Accounts for the State of Texas (the “Comptroller”) which documents that the following exemptions from state taxes applies to the Council effective as of 18 March 2022 (Taxpayer Identification Number – 32083715998):

• Franchise Tax;

• Sales and Use tax; and

• State portion of Hotel Occupancy Tax, Religious.

• Accordingly, all Texas-based churches that have been accepted as a member of the GMC are covered by the Council’s group exemption and may issue valid exemption certificates  as follows:

Sales & Use Taxes

Purchases

To claim the sales tax exemption on purchases of items that relate to the Church’s exempt purpose, complete and provide seller, Form 001-339, Texas Sales and Use Tax Exemption Certificate. Sellers do not have to accept an exemption certificate.  If this happens, ask the Seller for a completed FORM 00-985, Assignment of Right to Refund to request a refund directly from the Comptroller’s office.

Please Note that employees and volunteers cannot buy personal items tax free even if (i) traveling on official business or (ii) reimbursed by the Church.

Sales 

The Church will need to collect taxes on sales of taxable items by the Church.  Please note that this exemption verification does not mean that the organization and its subordinates hold a permit for collecting or remitting any Texas taxes.

Hotel Occupancy Taxes (State Portion Only).

To claim the hotel tax exemption, complete and provide the hotel, Form 12-302, Texas Hotel Occupancy Tax Exemption Certificate, and letter of hotel tax exemption from the Comptroller’s office at check-in.