Donna pushes open the door to the donations centre for Pupdated Furniture, looking forward to seeing what new furniture has come in for the Lost Dog's Sanctuary shop.
Ranjit looks up at the sound of the door. 'Hello Donna! Here to assess the new items? We've had a couple more tables come in - one of them isn't in great shape unfortunately.'
Donna follows him over to the tables, clipboard and pen in hand.
'This one is in pretty good condition, and we had a similar one recently that sold the day we put it out on the floor. A good clean and a bit of a polish, and we'll have it ready for sale by tomorrow morning. This other one though… it's pretty rough.'
They both look at the pine table. There's a long dark mark on the surface and it's leaning to one side.
'I don't think anyone will be interested in buying it as a table - but the wood is still solid underneath. I want to turn it into some floating shelves. It's still got that wavey decorative trim, and with that and a coat of paint it'll come up a real treat.'
'I love it!' Donna said. 'Ok, so that table will be ready tomorrow, and we'll have this one as a set of shelves later in the week.' She runs her finger down the stock list until she finds the two tables. She ticks the 'GST-free' checkmark for the first one. For the other, she crosses out 'pine table' and writes in 'floating shelves', and marks it as 'GST applies'.
Following the trail to GST-free sales
Many not-for-profit (NFP) organisations raise funds by selling donated second-hand goods. Hidden gems and pre-loved treasures can provide valuable support for your organisation's activities.
But before you put your goods on the sales floor, it's worth checking the GST rules.
Character of goods sold
Donations and gifts are generally not subject to GST when they are given voluntarily and the donor does not receive anything of material value in return.
Selling those donated goods may be GST-free if all the following apply:
- The sale is made by an eligible entity, such as an endorsed charity, some gift-deductible entities, or government schools.
- The goods are donated or gifted to the NFP selling them or acquired from another eligible entity.
- The donated goods have not been altered from their original character.
Cleaning, restoring or repairing donated goods before they are sold is fine, as that generally will not change their original character.
However, if you transform your donation into something entirely new, your treasures no longer qualify as GST-free when sold.
X marks the spot
If your NFP sells donated second-hand goods, learn more at GST on sale of donated second-hand goods.
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