Non-Church Related Income
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Table of Contents
Non-Church Related Income ………………………………………………………… 002
Rental Income ………………………………………………………………….. 003
Sale of Non-church Related Items ………………………………………….. 004
Receiving and Reporting Sales Tax ………………………………………… 005
Federal Tax on Income-Producing Activities …………………………… 006
References and Resources …………………………………………………………... 007
Forms………………………………………………………………………………………008
Facility Rental Policy …………………………………………………………. 009
Facility Rental Application …………………………………………………… 011
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Non-Church Related Income
Churches and religious organizations may engage in income-producing activities
unrelated to their tax-exempt purposes, as long as the unrelated activities are not a
substantial part of the organization’s activities (i.e. revenue from recycling bin on
property). However, the net income from such activities will be subject to the Unrelated
Business Income Tax (UBIT) if the following three conditions exist
■ the activity constitutes a trade or business,
■ the trade or business is conducted on a regular basis, and
■ the trade or business is not substantially related to the organization’s exempt purpose.
(The fact that the organization uses the income to further its charitable or religious
purposes does not make the activity substantially related to its exempt purposes.)
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Rental Income
Generally, income derived from the rental of real property and incidental personal
property is excluded from unrelated business income; however, there are certain
situations in which rental income may be categorized as unrelated business taxable
income and be subject to unrelated business income tax (UBIT):
■ if a church rents out property on which there is debt outstanding (for example, a
mortgage note), the rental income may constitute unrelated debt-financed income
subject to UBIT . (However, if a church or convention or association of churches
acquires debt-financed land for use in its exempt purposes within 15 years of the time of
acquisition, then income from the rental of the land may not constitute unrelated
business income.)
■ if personal services are rendered in connection with the rental, then the income may
be unrelated business taxable income, or
■ if a church charges for the use of its parking lot, the income may be viewed as
unrelated business taxable income.
See Facility Rental Forms
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Sale of Non-church Related Items
A Church may obtain UBIT from other sources. For example, a church might be
required to collect sales tax on behalf of the state or local tax jurisdiction when it
acquires proceeds from on-site vending machines or from the sale of books in the
church book store.
The sale of admission tickets to an event (as opposed to a suggested donation) may
also require collection of sales tax.
In certain areas, the rental of a significant part of the church building to an outside entity
may require the collection of a use tax.
The methodology for reporting and paying these taxes varies greatly, and the Treasurer
should ensure that any such reports and payments are processed within the required
time limits.
See State Taxing Agencies, http://www.taxadmin.org/fta/link/
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Receiving and Reporting Sales Tax
Tax laws for local and state jurisdictions vary greatly, so the Treasurer is urged to
contact an accountant or other resource when faced with issues regarding state and
local taxes.
In general, most jurisdictions require that a sales tax be collected whenever a church
sells a good or product.
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Federal Tax on Income-Producing Activities
If a church or other exempt organization has a gross income of $1,000 or more for any
taxable year from the conduct of any unrelated trade or business, it is required to file
IRS Form 990-T, “Exempt Organization Business Income Tax Return,” for that year . If
the church is part of a larger entity (such as a separate 501 ( c ) 3), it must file a
separate Form 990-T if it has a separate EIN.
Note: Form 990-T is due by the l5th day of the 5th month following the end of the
church’s tax year. [IRC section 512(b)(12) provides a special rule for parishes
and similar local units of a church. A specific deduction is provided which is
equal to whichever is lowest, $1,000 or the gross income derived from any
unrelated trade or business regularly carried on by such parish or local unit of a
church.]
See IRS Publication 1828 for more information.
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REFERENCES AND RESOURCES
Internal Revenue Service Publication 1828 http://www.irs.gov/pub/irs-pdf/p1828.pdf
Internal Revenue Service Publication 990 T http://www.irs.gov/pub/irs-pdf/i990t.pdf
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FORMS
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YOUR MCC FACILITY RENTAL POLICY (SAMPLE 1)
The Board of Directors has established fees for use of facilities of the Your MCC. We
wish to provide a community service by making the facility available when possible.
Fees are designed to cover overhead and operating costs. It should also be understood
that fees for the use of the facility are in addition to the Administrative Fee and Security
Deposit Fee listed below.
Fee Schedule for Non-Members
Church Auditorium
·
$125 – Four hours or less
(Includes use of kitchen for serving purposes only and area adjacent to kitchen)..
Additional $25 per hour
(Rentals over four hours, not to exceed a $75.00 maximum. Thus, rental for an all-day
event would be $200.)
Administrative/Custodial Fee – $50 to open/close the church
Security Deposit – $100.00
A separate personal or organizational check or cash is required. The Security Deposit
will be returned upon inspection of the building after rental use to ensure that no
damage has occurred or additional janitorial service is required.
Fee Schedule for Members
1.
$50 for personal gatherings other than stated in paragraph 2.
2.
No charge for weddings/commitment ceremonies and memorial
services/funerals.
Terms
1.
Fill out the Application for Use form and return it to the Office Administrator.
The application will not be considered as officially accepted until it has been
signed as approved and appropriate fees have been paid in full.
2.
Use of premises for any illegal purpose is prohibited. If it appears that any
group contracting for use of the premises intends such use, any Board member
or Minister may cancel such contract, immediately.
3.
This church has a no smoking policy.
4.
Any group using the building, rooms, or facilities of the Church by
arrangement shall hold the church, the Board of Trustees, and its employees free
and harmless from any loss, damage, liability, cost or expense that may arise
during or to be caused by use of the church property by such group.
5.
The Administrative Fee is a basic fee primarily intended to make sure that
the building is locked, secured, and left in good order following authorized use.
6.
The primary purpose of the church facility is to fulfill the purposes,
programs, and functions of the church itself. Any scheduled church function shall
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take precedence over any other use. When scheduling conflicts arise, the TBD
will decide which group has first choice or priority to use the rental
space. Generally, members come first; long-term renters are second; and onetime renters are third.
7.
The facilities shall be used for the purpose described in the Application for
Use of Facilities and not for any other purpose.
8.
No equipment, staging, furniture, etc. shall be brought into the facility other
than that which is clearly stated in the Application for Use of Facility.
9.
It is not, in general, our intention to have our facilities used by commercial,
business, and/or "profit-making" organizations. All applications of this nature
must, therefore, be approved by the Board of Directors
10. Use of Kitchen: church dishes, silverware, pots and pans, tablecloths and
towels are not to be used unless rented. The kitchen may be used for the
purpose of serving, but not the preparation of meals unless you hire one of our
Licensed Food Handlers. Kitchen is to be cleaned after use.
11. Nothing may be attached to building walls.
12. The main floor office, downstairs offices, the nursery, and classrooms are
not for rent and are not to be entered.
13. The name of the church is not to be used in any way that would indicate
church sponsorship of an event.
14. The seating capacity of the auditorium is TBD. Capacity of the area adjacent
to the kitchen is TBD. These limits are not to be exceeded.
15. Keys will not be given without a security deposit and a multiple use contract.
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BUILDING RENTAL APPLICATION (SAMPLE 1)
Name / Description of Event : ______________________________________________
Sponsored by Member? : Yes
No
Member Name: ________________________
Event Date* ___/___/___ Event Time___________ (please include setup/break down)
*If this is a recurring event please note here with frequency details:
______________________________________________________________________
Area(s) requested:_______________________________________________________
Approximate number of people attending event ________________________________
Items requested for use ( i.e. # of chairs)
______________________________________________________________________
CONTACT INFORMATION
Name: ________________________________________________________________
Address: ______________________________________________________________
City/State/Zip: __________________________________________________________
Contact Number with Area Code: ___________________________________________
I agree to abide by all Rules and Regulations for Use of Facilities of the Your MCC and
have agreed upon the fees as shown on the attached.
Applicant Signature: ______________________________ Date ______/______/_____
Approved by: _____________________________________ Date _____/_____/______
Security Deposit Received: _______________________ Returned: _______________
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BUILDING USE FEE SCHEDULE
Sanctuary* / hour: $ 0.00
Chapel* / hour: $ 0.00
Auditorium* / hour: $ 0.00
Kitchen* , **/ hour $ 0.00
Chairs (each): $ 0.00
Coffee Urns (each): $ 0.00
Piano per hour: $ 0.00
Tables (each): $ 0.00
Add additional items here: $ 0.00
Clean up Fee: $ 0.00
Licensed Food Handler Requested: Yes
No
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FACILITY USE REQUEST FORM (SAMPLE 2)
FOR COMMUNITY USE
Name of Group:_________________________________________________________
Contact Person:_________________________________________________________
Address: ______________________________________________________________
Phone: (Day) _____________ (Evening) ________________ (Fax) _______________
Email: ________________________________________________________________
Date(s) of Event: ______ to ______ Time of Event: _____ AM/PM to _____ AM/PM
Space Requested
Audio Equipment
_____ Sanctuary/Community Room
______ Sound System
_____ 1st Floor Classroom
______ Microphones
_____ 1st Floor Fellowship Area
______ Number of Microphones
_____ 2nd Floor Library
______
_____ Kitchenette
______ Request permission for
alcoholic beverage use
Keyboard
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Contact Information
Event Coordinator: ______________________________________________________
Phone: (Day) ____________ (Evening) _________________ (Fax) _______________
Email:
___________________________________________________________
Clean-Up Person: _______________________________________________________
Phone: (Day) ____________ (Evening) _________________ (Fax) _______________
Email:
___________________________________________________________
(A clean-up person can be provided by the church at a rate of $50, payable in advance.)
Sound Technician: ______________________________________________________
Phone: (Day) ____________ (Evening) _________________ (Fax) _______________
Email:
___________________________________________________________
(A sound technician can be provided for you from the church at a rate of $25 per hour in advance.)
Keyboardist: ___________________________________________________________
Phone: (Day) ____________ (Evening) _________________ (Fax) _______________
Email:
___________________________________________________________
(Church Musician may be available for your use - rate would be individually negotiated.)
Will your group require a key to the facility?
_____ Yes
_____ No
(Key Deposit of $25 is to be paid when key is received and refunded upon its return.)
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Space Usage Fees
Space usage fees include set-up and clean-up time. A Minimum deposit of 50% of the
total space usage fee is due at time of confirmation; the balance is due at time of set-up
or by one hour prior to the beginning of the event, whichever is earliest.
Cleaning Deposit
A Cleaning Deposit of $100 is due at the time of set-up, or one hour prior to the
beginning of the event. This deposit is fully refundable given that the facility is cleaned
accordingly after usage. This deposit may be retained fully, or refunded in partial
increments, if the cleaning is deemed incomplete. An opportunity to “make good” by
tending to the cleaning infraction will be offered if it is determined that a portion of this
fee is to be otherwise retained.
Facility
½ Day Rate
(Min)
Full Day Rate
Sanctuary / Community
Room
$125
$250
1st Floor Classroom
$25
$50
1st Floor Fellowship Area
$50
$75
Not available
Not available
2nd Floor Meeting Room
$25
$50
Key Deposit (refundable)
$25
$25
2nd Floor Library
Amount Due
(calculate)
Other
Total Due
Less Deposits
Balance Due
I have read and agree to abide by the Facility Use Policies and Stipulations for
Community Events. I understand that failure to comply with these terms will result in the
immediate cancellation of the event.
_____________________________________
________________
Signature of Event Coordinator
Date
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(For Internal Use Only)
Date Request Received:
___________________
Facilities Committee Representative
Date Approved:
___________________
Key Issued:
_____ Yes _____ No
Permission given for
Alcohol Use:
_____ Yes _____ No
ABC License Received:
_____ Yes _____ No
Deposit Amount:
$_________
____ Check #
____ Cash
____ Credit
Account Number: _________________________________ (Exp) _____________
Name as Appears on Credit Card: ________________________________________
Signature: ___________________________________________________________
Balance Due:$__________________
Date Due:__________________
Balance Received By:_________________________ Date Received:______________
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FORM 990-T
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