Animal Welfare Professionals

Our Catio Cat Lounge has an adoption center and a small retail space where we sell t-shirts and other logo items.  We do also have a small stock of carriers and a few cat care items.  This is our first full year as a non-profit.  When I was setting up our Tennessee Business at the state level as a qualified Charity, obtaining our state business license and our sales tax account, the person with whom I spoke told me that the adoption center would be exempt from sales tax, but all merchandise had to be counted toward sales tax filing.  I didn't realize that sales taxes had to be filed monthly, there was no specific guidance out there stating such and, specifically, I wasn't told during all the interactions I had with the Revenue Board.  Now, we are playing catch-up owing for 2 months.  Everything is done on-;ine and fairly easy to file.  I did speak with a State representative about what counted in the gross sales and that adoption fees were exempted.  She stated they were considered sales of animals and were not exempt from sales tax.  

We polled a number of local and state rescues and all count these as donations, not as merchandise sales.  I am waiting on comment by our CPA but the state is adamant; the adoption of an animal is the sale of a pet.   Anyone else have these issues with their respective states?  I did look up articles and only four states truly exempted adoptions from state taxes.   Any comment or assistance would be appreciated!

Goods and services  are taxable. We collect sales tax on adoptions, boarding fees, merchandise. Minnesota

Our Catio Cat Lounge has an adoption center and a small retail space where we sell t-shirts and other logo items.  We do also have a small stock of carriers and a few cat care items.  This is our first full year as a non-profit.  When I was setting up our Tennessee Business at the state level as a qualified Charity, obtaining our state business license and our sales tax account, the person with whom I spoke told me that the adoption center would be exempt from sales tax, but all merchandise had to be counted toward sales tax filing.  I didn't realize that sales taxes had to be filed monthly, there was no specific guidance out there stating such and, specifically, I wasn't told during all the interactions I had with the Revenue Board.  Now, we are playing catch-up owing for 2 months.  Everything is done on-;ine and fairly easy to file.  I did speak with a State representative about what counted in the gross sales and that adoption fees were exempted.  She stated they were considered sales of animals and were not exempt from sales tax.  

We polled a number of local and state rescues and all count these as donations, not as merchandise sales.  I am waiting on comment by our CPA but the state is adamant; the adoption of an animal is the sale of a pet.   Anyone else have these issues with their respective states?  I did look up articles and only four states truly exempted adoptions from state taxes.   Any comment or assistance would be appreciated!