Get your taxes done using TurboTax

Sales tax and income tax are two different issues.  Whether you have to collect sales tax on all, some, or none of your sales, will depend on your state sales tax laws and you need to check with your state.  

You generally won't owe corporate income tax on the profits (gross sales minus expenses) as long as those profits fund your other charitable and non-profit missions.  But, you at least need to be aware of "Unrelated business income tax" UBIT.   Even if the overall church is non-profit, you can owe income tax on the profits from "unrelated" business ventures.   Whether your gift shop strays into unrelated business territory depends on what the store sells and what purpose the money is used for.   You may want to have an accountant advise you on the issues of unrelated business income.   

View solution in original post