Often times student organizations ask about using a tax identification number and/or a tax exempt number. Here are the differences:
Tax Identification Number
A tax identification number is a nine-digit number (for example, 12-3456789) assigned to sole proprietors, corporations, partnerships, estates, trusts, and other entities for tax filing and reporting purposes.
For organizations utilizing the Student-Faculty Accounts available through the Cashier's Office, you are allowed to use the University's Tax Identification Number as a benefit of being officially recognized.
Organizations applying for an account at any other financial institution must apply for an Employee Identification Number (EIN) through the IRS. This electronic form is available at http://www.irs.gov/businesses/small/article/0,,id=102767,00.html, and many banks and credit unions will help you to complete this fairly simple process.
Tax Exempt Number
Sales to certain non-profit organizations and governmental units are exempt from Wisconsin sales or use tax. So that retailers can identify these organizations that qualify for this exemption, the Department of Revenue issues the organization a Certificate of Exempt Status number. Groups that qualify for a CES number include:
- Organizations, including youth organizations, organized and operated exclusively for religious, educational, scientific, or charitable purposes, or for the prevention of cruelty to children or animals.
- Federal and Wisconsin governmental units. Governmental units of other countries and states or those representing Native Americans will not be issued a Certificate of Exempt Status.
Examples of organizations that do not qualify for a CES number are civic organizations, chambers of commerce, business or union organizations, fraternal or recreational groups, professional societies, social clubs, or veteran organizations and their auxiliaries. Purchases made by these organizations will be subject to Wisconsin sales and use tax unless some other exemption applies.
Student Organizations are not allowed to use the University's tax exempt number. Your group may, however, apply for its own number. To apply you, you will need a copy of your constitution and by-laws, Statement of Income and Expenses for your last accounting period, and an IRS determination letter.
If you are a chapter in a state or national organization, you may be able to use their CES number, or at least a copy of their IRS determination letter. If your groups raises more than $15,000 in a year, you should not apply for exempt status. Applications can be printed from the following web site: http://www.dor.state.wi.us (you want the current tax year form for Sales & Use (Form S103).