Comments on: Can A For Profit Business Take A Tax Deduction For Sales Discounts To A Non Profit? How Would You Book That?

By: feanor

feanor — Thu, 17 Dec 2009 16:48:42 +0000

NO.
The discounted price means that you collected less revenue, and therefore there is less revenue to report.
Example. You normally charge $100 for something, but you sell it for $70 to a non-profit organization. You would normally report $100 in revenue. Instead, you report $70 of revenue. The $30 tax deduction you’re thinking of is built into the fact that you reported $70 instead of $100, so you don’t actually report a $30 deduction anywhere.

By: SmartA$$

SmartA$$ — Thu, 17 Dec 2009 16:48:42 +0000

Yes, because the non-profit would still have to pay the tax on the invoice raised by the for profit business.
Reduce the invoice value by the discount amount.
Credit Sales, Debit Accounts receivable (Receivables) by the amount for a credit sale, or Bank/cash and Tax for a cash sale.
Blondie

By: Blondie

Blondie — Thu, 17 Dec 2009 16:48:42 +0000

No, you can’t take a deduction for sales discounts. The discount amount was never shown as income in the first place.