Ask the taxgirl: Girl Scout cookies

Taxpayer asks:

we’ve been trained that cookie donations are not tax deductible. Can u clarify?

Taxgirl says:

This question is actually in response to something that I posted on twitter about the Girl Scout “Cookies from Home” program. I thought it was a good question and I posted my gut reply which was:

As a tax atty, I would also say yes. $ donated to charitable org for charitable cause, nothing received.

(Quick explanation: you are limited to 140 characters per “tweet” on twitter, hence the short phrases.)

I wanted to expand on this question because I thought it touched on some really good issues. To qualify as a charitable gift, a donation must be made to a charitable organization with no strings attached. If there is any benefit (other than warm fuzzies) to the donor, the value of that benefit must be subtracted from the value of the gift. For example, if you pay $100 for a charitable dinner and the value of the dinner was $30, your charitable donation is $70. Make sense?

In the case of the Girl Scouts, Girl Scouts of the USA is a nonprofit 501(c)(3) organization. The “Cookies from Home” program allows you to pay for the cost of a box of cookies and instead of taking the cookies home and eating them (even though you know you want to), the Girl Scouts will send them to our military personnel abroad. The cost of the donated boxes is tax deductible to you.

In contrast, if you were to buy a box of cookies and just give them to a homeless person or other person in need, it would not be deductible.

The key difference between the two scenarios is the charitable organization – you cannot deduct money or the cost of goods donated to an individual or noncharitable organization, no matter how deserving. For more on this, check out my prior post.

And here’s the official word from Girl Scouts:

Q: Is the purchase of Girl Scout Cookies tax-deductible?

A: No and Yes.

No, if the customer keeps the cookies. Individuals who buy Girl Scout Cookies and take the cookies home, or consume them, have purchased a product at a fair market value. For this reason, no part of the price of a box of Girl Scout Cookies used in this way is tax-deductible.

Yes, if the customer leaves the cookies with Girl Scouts. Many Girl Scouts ask customers to pay for one or more boxes of cookies for use in their community service project or “gift of caring,” for example, collecting for a food pantry. The customers not receiving any Girl Scout Cookies do not benefit directly from paying for them. Those individuals may treat the purchase price of the donated cookies as a charitable contribution.

So, if you’re in the mood to help out, consider donating the cost of a box of Girl Scout cookies. Don’t forget your receipt!

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Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.

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6 thoughts on “Ask the taxgirl: Girl Scout cookies

  1. The question may be even more simple than expanded upon. When I was in Girl Scouts, 1969-1973, we sold cookies door to door. If asked about the tax donation, we were given the ‘value’ of the box of cookies, the ‘price’ of the box of cookies and the difference is deductable. For example, the price is determined by the troop leaders. In order to have money for camping trips or events, we had to raise money by such activities as cookie sales. Ours was usually 100 percent above cost. Thus if a box of cookies cost one dollar ($1.00), we would add 100 percent markup and charge two dollars ($2.00) per box. So if someone bought a case of 12 boxes of cookies, they could deduct $12.00 of $24.00 spent on their 1040 Schedule A. These prices are only for an example. It is quite proper to ask the salesperson [scout or leader] what the ‘value’ of the box of cookies is — not the price — so that you may do the math at tax time.

    Did you know that Girl Scout Cookies may be bought in bulk and frozen? Yes, allow about 4 hours to thaw at room temperature and enjoy your favorite cookies throughout the year!

  2. I love frozen Girl Scout cookies!!! and trying to convince people they cannot write off the 40 boxes they bought can be difficult. Same goes with another post you wrote on charitable deductions for your time to a charity.

    Travel for charitable causes can also get you into trouble when you take a vacation and do a little charity work but want to deduct the entire trip.

    Love the articles 🙂

  3. When I was a Boy Scout and later a register Girl Scout for 15 yrs. while my 3 daughter were active, I was told that 50% of the cost of the item (cookies) had to go to the organization. It was my understanding that 50% of the price was therefore deductible. Was this changed or was I misinformed.

  4. I am also a lawyer and I fundamentally disagree with this analysis. If the product costs the girl scouts one dollar and they sell it for four dollars, three dollars of the amount paid is a charitable contribution. Alternatively, even if the “retail” value could be considered in this scenario (as though the girl scouts would market it at true retail value), at a cost of one dollar, it is highly unlikely that the retail price would exceed two dollars, thus making two dollars of the four dollar price paid deductible.

    This is the same analysis that applies to contributing $100 to a group for a dinner that costs $50. The amount above the value for the dinner is deductible and the value for the dinner is what it cost the organization — as that is the product value received.

    Most fundraisers for school and other non profit groups that sell products result in a contribution to the group of forty to sixty percent. This amount is a charitable contribution to that group. The Girl Scouts are no different.

    The idea that there has to be an exact retail price for the exact same product before anything is deductible is flawed. There is no such requirement in the IRS Code and that is not the legal test. The value of the product or service received is not deductible, but any excess over the value is deductible. The Girl Scouts get four plus dollars a box for the cookies because there is a contribution component. That they only pay one dollar a box for the cookies is darn good proof of it.

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