Fiscal Policies and Procedures for BSA Units

Current Unit Registration Options

  • Charter Organization Units: Assets of the unit generally belong to the Charter Organization and are managed by the unit.
  • Council Registered Units: Assets of the unit generally belong to the Council and are managed by the unit.
  • Parents of/Groups of Citizen Units: Assets of the unit generally belong to the unit and are managed by the unit.

Tax Exempt Status

  • Charter Organization Units: Charter organizations vary widely, but the tax status of your unit is usually the same as that of your charter organization.
  • Council Registered Units: Units properly registered, and using the council EIN for banking purposes, are generally tax exempt. Consult your local council for instructions and policies.
  • Parents of/Groups of Citizen Units: Many units have their own EIN, but this does not equate to tax exempt status. Units should not incorporate or seek tax exempt status due to the myriad of state registration and fundraising registration requirements, and potential sales tax, income tax, gift tax, and property tax liability. BSA policy prohibits units from incorporating or seeking tax exempt status.
  • Group Exemption: Units cannot be included on BSA’s group exemption. Only local councils and local council trusts are permitted by the IRS. Units are not separately identified on the Group Exemption. Council Registered Units are an extension of the Local Council and operate under the local council’s tax exempt status. Local Councils derive their tax exempt status from the BSA’s Group Exemption and are listed individually. For tax purposes, local councils are subordinate organizations of the Boy Scouts of America and covered under the Boy Scouts of America’s group exemption ruling. Though local councils are separate entities, the BSA exemption ruling extends the same recognition of tax- exempt status to the local councils as to the Boy Scouts of America National Council.
  • State Sales Tax Exemption: Consult with your own state as this varies widely across the country.

Unit Banking

  • Checking Accounts: Unit funds should be deposited in a checking account that requires two signatures, typically the Treasurer and the Committee Chair.
    • Charter Organization Units: Contact your charter organization for permission to use their EIN and direction on who to use as the responsible party. In the alternative, many councils allow units to deposit funds in custodial accounts in the council service center.
    • Council Registered Units: Contact your council for permission to use their EIN and direction on who to use as the responsible party. Council Registered Units previously using separate bank accounts through a Charter Organization should close those accounts and follow the local council policies for a new account. Council Registered Units should not apply for their own EIN, but rather open a bank account at a council approved bank under the Council EIN with the unit name as the account holder. Council registered units should not use custodial accounts. CRUs should report financial activity annually to the Local Council using the provided template by January 15 each year. Insert LINK here – Unit Finance Report template and Bank account open/close letters.
    • Parents of/Groups of Citizens Units: Units should consult a tax advisor prior to applying for an EIN (for banking purposes only) or opening up a bank account. A Revised: May 2023 BSA Legal Department – This is not tax or legal advice. “responsible party” must be designated on the application, and that person’s social security number must be provided. Units applying as Community or Volunteer Groups should not check the box for Tax Exempt Organizations.
  • PayPal/Venmo: PayPal can be used to accept unit payments. PayPal account instructions are available here. The IRS introduced new reporting requirements for payments received for goods and services, lowering the threshold to $600. Third party settlement organizations, such as PayPal and Venmo, will be required to provide customers with a 1099-K form if they receive $600 or more in goods and services transactions during the 2023 tax year. Charter Organization Units and Council Registered Units utilizing PayPal or Venmo should ensure they are using appropriate EINs and following all policies and procedures. Parents of/Groups of Citizens Units should consult their own tax advisors.

Equipment Insurance

All equipment should be insured with appropriate liability, casualty, and property coverage. The charter organization or local council may assess a fee to the unit for providing insurance coverage and should, in compliance with the Guide to Safe Scouting materials, regularly inspect all vehicles and trailers.

Dissolution of Unit

The unit committee shall apply unit funds and property to the payment of unit obligations.

  • Charter Organization Units: Surplus funds should be turned over to the charter organization to be used for Scouting purposes.
  • Council Registered Units: Surplus funds should be turned over to the council.
  • Parents of/Groups of Citizen Units: Surplus funds should be turned over to the council

Fundraising

  • BSA Unit Money-Earning Applications: Approval must be given by the charter organization and the council for all unit fundraising.
  • Soliciting Gifts: As gifts to units are generally not tax deductible, units should not solicit gifts. Anyone can contribute to a unit, but the donor would not receive a charitable deduction. Gifts made to councils or Charter Organizations cannot be passed through to the unit.
  • Scout Accounts: Scouts can credit a reasonable amount of funds earned toward their Scouting expenses. Scouts cannot use funds earned for any non-Scouting purposes and cannot take the money with them if they leave Scouting