§ 11-204

# (a)

The sales and use tax does not apply to:

# (1)

a sale to a cemetery company, as described in § 501(c)(13) of the Internal Revenue Code in effect on July 1, 1987;

# (2)

a sale to a credit union organized under the laws of the State or of the United States;

# (3)

a sale to a nonprofit organization made to carry on its work, if the organization:

(i) 1. is located in the State;
2. is located in an adjacent jurisdiction and provides its services within the State on a routine and regular basis; or
3. is located in an adjacent jurisdiction whose law:
A. does not impose a sales or use tax on a sale to a nonprofit organization made to carry on its work; or
B. contains a reciprocal exemption from sales and use tax for sales to nonprofit organizations located in adjacent jurisdictions similar to the exemption allowed under this subsection;

(ii) is a charitable, educational, or religious organization;

(iii) is not the United States; and

(iv) except for the American National Red Cross, is not a unit or instrumentality of the United States;

# (4)

a sale, not exceeding $500, to a nonprofit incorporated senior citizens’ organization made to carry on its work, if the organization:

(i) is located in the State; and

(ii) receives funding from the State or a political subdivision of the State;

# (5)

a sale to a volunteer fire company or department or volunteer ambulance company or rescue squad located in the State made to carry on the work of the company, department, or squad;

# (6)

a sale of tangible personal property, a digital code, or a digital product to a nonprofit parent–teacher association located in the State if the association makes the purchase to contribute the property to a school to which a sale is exempt under item (3) of this subsection or § 11–220 of this subtitle;

# (7)

a sale to a nonprofit organization made to carry on its work, if the organization:

(i) is qualified as tax exempt under § 501(c)(4) of the Internal Revenue Code; and

(ii) is engaged primarily in providing a program to render its best efforts to contain, clean up, and otherwise mitigate spills of oil or other substances occurring in United States coastal and tidal waters; or

# (8)

a sale to a bona fide nationally organized and recognized organization of veterans or an auxiliary of the organization or one of its units, if the organization is qualified as tax exempt under § 501(c)(4) or § 501(c)(19) of the Internal Revenue Code.

# (b)

The sales and use tax does not apply to a sale by:

# (1)

a bona fide church or religious organization, if the sale is made for the general purposes of the church or organization;

# (2)

a gift shop at a mental hospital that the Maryland Department of Health operates;

# (3)

a hospital thrift shop that:

(i) is operated by all volunteer staff;

(ii) sells only donated articles;

(iii) contributes the profits from sales to the hospital with which the shop is associated; and

(iv) is not operated in conjunction with a gift shop or another retail establishment;

# (4)

a vending facility operated under the Maryland Vending Program for the Blind if:

(i) the facility is located on property held or acquired by or for the use of the United States for any military or naval purpose; and

(ii) a post exchange or other tax–exempt concession is located and operated on the same property;

# (5)

an elementary or secondary school in the State or a nonprofit parent–teacher organization or other nonprofit organization within an elementary or secondary school in the State for the sale of magazine subscriptions in a fund–raising campaign, if the net proceeds are used solely for the educational benefit of the school or its students, including a sale resulting from an agreement or contract with an organization to participate in a fund–raising campaign for a percentage of the gross receipts under which students act as agents or salespersons for the organization by selling or taking orders for the sale;

# (6)

a parent–teacher organization or other organization within an elementary or secondary school in the State or within a school system in the State;

# (7)

subject to subsection (e) of this section, a bona fide church, religious organization, or other nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code if:

(i) the sale is made at an auction sale; and

(ii) the proceeds of the sale are used to carry on the exempt purposes of the church or organization; or

# (8)

a nonprofit organization exempt from taxation under § 501(c)(3) of the Internal Revenue Code that maintains a memorial on property that is owned by the State if the proceeds of the sale are used to maintain a memorial on property that is owned by the State.

# (c)

To qualify as an organization to which a sale is exempt under subsection (a)(3) or (5) of this section, the organization shall file an application for an exemption certificate with the Comptroller.

# (d)

The Comptroller may treat the possession of an effective determination letter of status under § 501(c)(3) or (13) of the Internal Revenue Code from the Internal Revenue Service as evidence that an organization qualifies under subsection (a)(3) or (5) or (1) of this section, respectively.

# (e)

For a sale described under subsection (b)(7) of this section that is not otherwise exempt under this section, only that part of the sale price that qualifies for a deduction under the federal income tax as a charitable contribution under the regulations and guidelines of the Internal Revenue Service is exempt from the sales and use tax under this section.