Tax Exempt Form Overview
Form 990N Return of Organization Exempt from Income Tax
A tax exempt form can be used by a non-profit or charitable organization or by employees and branches of the government. A tax exemption form is usually used to keep an organization that has been granted tax exempt status from having to pay taxes, such as sales taxes or a use or excise tax.
Typically, the tax exemption form must be presented at the time the tax would be charged. If the tax exempt form is not presented at the time, however, there is typically no opportunity for the person or group which should have used the tax exemption form to provide it at a later time and recoup to loss of tax payments.
The use of a tax exemption form is typically highly restricted. While there may sometimes not be any legal restrictions placed on the use of a tax exempt form, many times an organization that is permitted to use a tax exempt form may limit the use of the tax exemption form by members of the group.
Using a state tax exemption form or a federal tax exempt form may be affected by whether the account involved in the transaction was Centrally Billed Account, an Individually Billed Account, or an Integrated Accounts – CBA. In addition, since each state treats the above types of accounts differently, the usage of a tax exemption form with each type of account will vary.