States often require the sellers and purchasers of tangible personal property to pay taxes on the transactions transferring the personal property.  These taxes are referred to as “sales taxes,” a term that typically includes both sales tax and a complementary use tax.  

For faith-based 501(c)(3) organizations, the imposition of taxes on sales and purchases is detrimental because it diverts both financial and administrative resources from the organizations’ core religious and charitable work. Such organizations have an existing obligation to avoid private benefit and excessive commercial activity, so transaction taxes burden resources pledged to religious or charitable purposes, rather than impose taxes on transactions that increase private wealth.

The Index includes two separate factors related to state sales and use taxes: (1) State laws governing taxes on transactions in which the nonprofit is the purchaser; (2) State laws governing taxes on transactions in which the nonprofit is the seller. This page ranks the state scores of the former.

Below is a tier ranking of each state for this factor. Click on the state's name to open up its page, which provides more information on that particular state's overall score and relevant laws.