Section 45IAC2.2-5-59. Not-for-profit organizations to improve skills of members; sales

   (a) The state gross retail tax shall not apply to sales by qualified not-for-profit organizations of tangible personal property of a kind designed and intended to improve the skill or professional qualification of members of the organization for carrying on the work or practice of their trade, business or profession and not used in carrying on a private or proprietary business.

  (b) The gross receipts from sales of tangible personal property by a qualified not-for-profit organization are exempt under this rule only if:

(1) The tangible personal property is sold exclusively to members and is designed and intended to improve the skill or professional qualification of such members; and

(2) The organization is not carrying on a private or proprietary business with respect to such sales.

  (c) Designed and intended to improve the skill of professional qualification. The property sold to members of the organization must be designed and intended to improve the skills of such members.

─EXAMPLE─

(1) Sales by a qualified not-for-profit medical society to its members of technical booklets which provide medical information are exempt from tax. These technical booklets are intended to improve the professional qualifications of the members.

(2) Sales of meals at medical society meetings are taxable because the meals are provided for the convenience of the organization and its members. Such sales are taxable even when served in conjunction with a meeting where the technical booklets described in (1) of this section are sold.

(3) A professional society of certified public accountants publishes and sells technical booklets to students who are not members of the professional society. The sales are taxable because this exemption is limited to sales to members.

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  (d) Qualified not-for-profit organizations. This regulation [45 IAC 2.2] applies only to not-for-profit organizations which are qualified not-for-profit organizations. For example, sales of instructional booklets on golf techniques by a country club are taxable. A country club is a predominantly social not-for-profit organization and not a qualified not-for-profit organization.

  (e) Definitions. Refer to Regulation 6-2.5-5-25(a)(010)(2) [45 IAC 2.2-5-55(b)] for the definition of a "qualified not-for-profit organization". (Department of State Revenue; Ch. 5, Reg. 6-2.5-5-26(b)(020); filed Dec 1, 1982, 10:35 am: 6 IR 54)