Charity auctions & sales tax?

[Richard Monro]

Under current law no sales tax is due since no revenue was received. The charity on the other hand may have to render the sales tax as they do receive revenue from the sale of the art.

The down side for all of us donating art is that the Federal tax code only allows us to only deduct the cost of materials and labor that went into the art. That holds true even thought the art may have a market value of several thousand dollars or more. There is pending legislation that may change that, but until the law is changed we are out of luck when it comes to deducting the true value of our art.

[Michele Rushworth]

There are other threads that address this in more detail, but my tax accountant said I could deduct these donations as "advertising expense". Becasue of the way the tax code is currently written -- and even with the proposed amendments -- they don't qualify as charitable donations, as Richard mentioned.