G&P the local grain malter where we have been group buying our bulk grain. That they have been investigated, fined, and would no longer sell to anyone without a tax number.
"we have determined that we are potentially at odds with federal and provincial tax laws by selling directly to non-registered business entities. Effective immediately a new policy for selling to Home Brewing Groups. In order to continue to serve you we will need to hold your organization name and tax id on file." "We were audited last year and provided a fine. I am not doing this moving forward so we cannot legally sell to anyone that does not have a proper business #"
This of course is quite a pain for a club as small as ours. We could be a non-profit or a co-op but having just expanded from being a bunch of guys that meet in someone's garage that's quite a big step for us. G&P seem to been under fire for selling to clubs and individuals, have any other clubs out there heard from your local matler that they are also having this problem?
It seems that your club should calculate how much is being saved per year and comparing that to the costs of registering a business Partnership or a non profit organization. I am not sure about the latter but to register a business and getting a current bank account then a tax number is not that expensive, although you will have to show a profit or they will shut you down after 5 years. Who knows, you may be able to acquire new memberships for a small fee to show an income, and the cheaper grains will be an incentive to join. Also you will be legally able to sell grains to the general public for cheaper than most retailers at a small profit.
The non-profit way may be better for your situation. I cannot give any details so someone with better knowledge of this may chime in.
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At least I know when I buy a beer kit, grain, hops, anything natural from OBK that they don't charge me tax on those items, and pretty sure they aren't taking a loss on the taxes they aren't charging customers.
So why a brewing group/club would need to have a taxation number, in order to buy grain is just silly, as there is never any taxes that changes hands.