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Revenue and Taxation staff brief mayors on nonprofit tax-exempt status, fundraising and alcohol sales
Summary
Department of Revenue and Taxation presenters told village leaders to confirm tax-exempt status, file Form 990 annually and plan ahead for alcohol permits because the alcoholic beverage board meets monthly.
Marie, a presenter from the Guam Department of Revenue and Taxation(Business Privilege Tax area), told mayors and municipal staff at the Mayor's Council meeting that organizations must confirm whether they hold tax-exempt status before staging fundraisers and events.
She said organizations with prior tax-exempt status must file an annual information return (Form 990) each year; failure to file Form 990 for three consecutive years can lead to automatic revocation of tax-exempt status. Marie urged mayors to start reinstatement processes early if an organization's exemption has lapsed, because restoration requires agency review and is not quick.
The presentation covered related topics: events that charge admission should be reported to the Department of Revenue and Taxation's Business Privilege Tax branch so ticket ranges can be recorded. If an event includes alcohol and the host is a tax-exempt organization, the organizer must contact the compliance branch to seek approval from the Alcoholic Beverage Control board; Marie warned that the board meets only once a month and applications must be scheduled in advance to be voted on at the next meeting.
In discussion, presenters and mayors distinguished government entities (for example, a mayor's office or a municipal planning council) from nonprofit tax-exempt organizations. Presenters said government agencies that operate on municipal budgets should review what activities are allowable under their governmental accounts (for example, purchase and sale of alcohol and paying staff) before applying for tax-exempt status.
Presenters also advised on donations: donors should receive a contemporaneous receipt for charitable gifts (a threshold amount was discussed at the meeting as about $250, described by the speaker as approximate). Marie recommended villages decide whether donations should go to a municipal government account (subject to government spending rules) or to a verified nonprofit account, because where the money is deposited changes how funds may be used.
Mayors asked follow-up questions about distinctions between mayor's offices and municipal planning councils, transitions between incoming and outgoing officials, and how donations and receipts should be handled. Presenters encouraged mayors and village staff to contact the Department of Revenue and Taxation directly for case-specific guidance and to use the agency call center if they cannot reach a specialist.
The presentation closed with reminders to file returns on or before April 15 (or to file an extension to file, not an extension to pay) and to take steps well in advance of planned events so compliance issues do not prevent activities.
Ending
Presenters left contact options and urged mayors to arrange one-on-one follow ups for specific questions about reinstatement, change-of-officer filings, business licensing and how a village's status affects fundraising and alcohol permits.
