Everyone dreams of not having to pay taxes, right? While this isn’t a realistic possibility for everyone, there are certain cases in which individuals or organizations can qualify as tax exempt.
Today, we’re covering all of the details surrounding Walmart’s tax exemption program. Keep reading to find out if you and your organization qualify.
How Does The Tax Exempt Program Work At Walmart?
Walmart’s Tax Exemption Program provides qualifying organizations with a quick and easy way to make tax exempt purchases at Walmart or on Walmart.com.
Although many individuals are also considered tax exempt due to place of residence, the Walmart Tax Exemption Program is reserved exclusively for tax-exempt organizations. If your organization is considered tax exempt by federal definition, you can apply for tax exemption status at Walmart.
According to the IRS, organizations that operate “exclusively for religious, charitable, scientific, testing for public safety, literary, educational, or other specified purposes and that meet certain other requirements are tax exempt under Internal Revenue Code Section 501(c)(3).” You can read more about tax exempt organization status here.
Examples of tax exempt organizations include…
- Public schools
- Political organizations
To enroll in the Walmart Tax Exemption Program, you need to apply online. The application process involves providing various tax documents based on where you live. To view the list of required documents, click here. To learn more about Walmart’s Tax Exemption Program or to start your application, click here.
Individual Tax Exemption
The other common way to be considered tax exempt is to claim residency in a state that does not charge sales tax. For example, if you live in Oregon (which does not have sales tax) and do some of your shopping in Washington (which does), you do not legally have to pay taxes on your purchases even when shopping out of state. However, as an individually tax exempt resident, you still have to pay income tax, property tax, and other taxes which tax exempt organizations do not have to pay.
States that do not charge sales tax include…
- New Hampshire
Unfortunately, Walmart’s Tax Exemption Program does not work for individuals. To claim your tax exemption as an individual Walmart shopper, you will need to provide a tax exemption card at checkout. To learn how to get a tax exemption card, visit the Department of State’s website here.
To qualify for the Walmart Tax Exemption Program, you must be an operational member, owner, founder, or other leadership figure of a tax exempt organization in the US. To find out if you qualify, click here and find your state and organization type on the list.
The qualifications and application materials vary by state, so use the chart linked above to find out exactly what you need to qualify.
Tax Exemption Program Exceptions
According to federal law, tax exempt status cannot be used to purchase anything for private benefit. All purchases made at Walmart with your tax exempt status must directly serve the tax exempt organization and its purposes.
Purchases are also disallowed from benefiting the organization’s board members, officers, directors, etc. “more than insubstantially.” This is considered “inurement” and is specifically barred according to IRS regulations.
To learn more, check out this helpful document provided by the IRS, titled “How To Lose Your Tax Exempt Status (Without Really Trying).”
How To Get A Tax Exempt Certificate
Filing for tax exemption happens in two different ways depending on whether you’re an individual or the representative of an organization.
To apply for a sales tax exemption card as someone who resides in a sales tax-free state, click here. The process is different depending on where you live, so scroll down to the chart that lists the individual state processes. These applications are overseen by the State Department.
To apply for tax exempt status as an organization, click here. This process is overseen by the IRS.
How To Use Walmart’s Tax Exempt Program
If your organization is approved for the Walmart Tax Exemption Program, you will receive a Walmart Tax Exempt ID Card. Provide this card anytime you are making tax exempt purchases at Walmart, whether in person or online, to receive your tax exemption.
Walmart Tax Exempt Cards look like this…
Your tax exempt status will also be linked to your Walmart account, which will allow you to make tax exempt purchases on Walmart.com. You will not be able to apply for tax exempt status through Walmart without creating a Walmart.com account.
When logged into your tax exempt account on Walmart.com, you will automatically receive tax exemption at checkout. Make sure not to use this account when making personal purchases. If you have an existing Walmart.com account, you will need to create a new account linked exclusively to your tax exempt organization.
Walmart is not responsible for customers who abuse the tax exemption policy. If you are found to be committing tax fraud, you will be subject to the laws of the IRS.
The following items and item categories are disallowed from tax exemption at Walmart…
- Marketplace items (unless noted in some cases)
- Walmart Photo products
- Walmart Pharmacy products
- Walmart Tire Center products
- Vudu products
- Apple products
Unfortunately, self checkout registers at Walmart do not support the use of tax exemption cards, whether you have organizational tax exempt status or individual tax exempt status.
In order to make tax exempt purchases at Walmart in person, you will need to pay at a conventional register and show your tax exempt card to the cashier.
Other Stores With Tax Exempt Programs
Although tax exemption is a matter of US law, not all retailers are equipped to honor tax exemption at the time of purchase. In these cases, you will be charged tax at the POS and will have to apply for tax reimbursement after the fact.
To apply for reimbursement, you will need to go through your state’s Department of Revenue. Try using your search engine to search for “how to apply for tax reimbursement + [your state].”
Other retailers besides Walmart that offer convenient tax exemption programs include…
- TJ Maxx
- Home Depot
- Kroger (includes QFC and Fred Meyer)
- Best Buy