Summary: Learn how Tithely handles state sales tax based on nexus requirements, understand the difference between non-profit and tax-exempt status, and discover how to upload your tax exemption certificate.
Before You Begin
Federal vs. State Exemption: Being a registered 501(c)(3) non-profit only grants your organization federal income tax exemption. It does not automatically exempt you from paying state sales taxes. Sales tax is strictly governed at the state level, meaning you must apply for and hold a specific, state-issued sales tax exemption certificate depending on your state's individual laws.
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Verify Your Name: Your church or organization's name in Tithely must exactly match the legal entity name or "Doing Business As" (DBA) listed on your tax-exempt certificate.
Note: If your existing church name in Tithely does not match the certificate and you update your organization name, this currently will not sync with Stripe (this is a known issue).
Include Tithely: Tithely or YourGiving Inc must be explicitly listed on your Sales Tax Certificate.
Step-by-Step Instructions
Checking Your Status and Uploading Your Certificate
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Navigate to the Sales Tax or billing section of your Tithely dashboard to view your current status. You will see one of the following statuses:
Tax Exempt: Your certificate is approved, and you are not being charged sales tax.
Taxable: You are currently subject to sales tax.
Pending: Your uploaded certificate is currently under review.
Approved / Rejected: The final decision on your most recent certificate upload.
Expiration Date: The date your current certificate expires.
Upload your tax-exempt certificate. You can do this securely through ExempTax (a trusted, common solution used to verify tax-exempt status) or directly within the Tithely product interface. [Optional: Insert screenshot illustrating the certificate upload portal]
Wait for your notification. You will receive both an in-app notice and an email notice from ExempTax indicating whether your certificate was Approved or Rejected.
Review rejections and appeal. If your certificate is rejected, you will receive an email from ExempTax prompting you to log in to see the specific rejection reasons. From there, you will be provided the opportunity to upload a new, corrected file.
State Nexus and Taxability
Tithely evaluates "nexus" (our business connection to a state based on employees or revenue thresholds) once per year, with the next update occurring in September. We will proactively communicate if our nexus status changes in your state or if state laws change (e.g., California taxing software-as-a-service starting 1/1/2027).
States Where We Collect Sales Tax (Exemptions Allowed for Churches/501c3s): If you are located in one of these states, you can avoid sales tax by uploading a valid state exemption certificate:
States Where We Collect Sales Tax (NO Exemptions for Non-Profits): Due to state laws, non-profits are not exempt from sales tax on software in these states:
AL, AZ, CA (starts 1/1/2027), HI, IA, SC, SD, WA.
Troubleshooting & FAQs
What happens if/when my tax-exempt certificate expires? You will receive an email notice via ExempTax 30 days before your expiration date prompting you to upload a new certificate. You will also receive a notice upon the actual expiration date.
If I upload my tax-exempt certificate after being billed, can I get a refund? No. Tithely is not authorized to refund sales taxes that have already been collected. If you have a valid tax-exempt certificate, ensure it is uploaded via ExempTax, and you will need to reach out directly to your state's Department of Revenue to request a refund for past charges.
Do I have to use ExempTax to upload a tax-exempt certificate? No. While ExempTax is the secure platform Tithely uses to verify exempt status, you can also securely upload your tax-exempt certificate directly within your Tithely product dashboard.
What if our state laws change or Tithely reaches nexus in our state? Taxability and nexus changes can happen based on new state legislation or our annual evaluations. If we are newly required to collect sales tax in your state, we will communicate with you proactively and begin collecting it as soon as reasonably practicable.