Automating Tax-Exempt Status for Nonprofits Across AWS Accounts

Nonprofits and tax-exempt organizations often face challenges in ensuring their tax status is accurately represented across their Amazon Web Services (AWS) accounts. While these organizations can request tax-exempt status for their AWS accounts by submitting a case through the Support Center, the process can become cumbersome as they expand and create additional accounts without the correct tax status. Tracking down accounts with varying tax statuses and manually opening support cases can divert valuable resources away from their core missions.

To streamline this process, I have developed a tax analyzer that automates the detection of tax statuses across AWS accounts. In this article, I will present a straightforward solution that identifies which AWS accounts within an organization are incurring sales tax and demonstrate how this solution can automatically initiate a support case to rectify tax status.

Prerequisites

The solution is designed to operate in the us-east-1 region due to the AWS Support API endpoint.
It must be executed from the payer account, which should have consolidated billing enabled and have requested tax-exempt status.
AWS Cost Explorer must be enabled in the payer account. Follow these guidelines to enable it.

This tax analyzer can automatically log a support case if it detects an AWS account paying sales tax. However, please note that this feature is only available for payer accounts with either Business Support or Enterprise Support. Learn how to change your support plan.

Solution Overview

The solution deploys an AWS CloudFormation stack that creates an AWS Lambda function to analyze the cost and usage data in the payer account, sets up an Amazon EventBridge rule to periodically trigger the Lambda function, and configures an Amazon SNS topic to send notifications about any account changes, along with the necessary AWS Identity and Access Management (IAM) permissions.

Procedure: Installing the Analyzer

To install the tax analyzer, click the Launch Stack button or follow this link.

When the CloudFormation Create stack screen appears, ensure you are in your organization’s payer account.
In the Parameters section, enter the email address for receiving alerts. If you want the solution to automatically generate a support case when an account is found paying sales tax, enter “Yes” in the appropriate field. Remember, a support case will only be created if your payer account has Business or Enterprise Support enabled.

In just a few minutes, the solution will be installed. You will receive an email at the address you provided; click the Confirm subscription link to start receiving updates from the tax analyzer.

Running the Tax Analyzer

The solution will run automatically once a month. By default, it is scheduled for the 6th day of each month at 8:00 AM GMT (3:00 AM US Eastern Time).

When the tax analyzer operates, it performs the following actions:

Calls the GetCostAndUsage API for the previous month, categorizing data by LINKED_ACCOUNT and RECORD_TYPE to analyze costs across the organization.
If it finds an account with a non-zero tax record, it assumes that account is paying sales tax.
If you opted for automatic support case creation and an account is identified as paying sales tax, the solution will attempt to log a support case (only if the payer account has the necessary support plan).
The findings are reported via email to the address you provided during installation. The content of the email may vary based on whether any accounts were identified as paying sales tax and if a support case was opened.

Clean Up

To avoid incurring ongoing charges, you can delete the CloudFormation stack created for this solution through the CloudFormation console.

Cost Considerations

Since this solution activates monthly, associated costs are kept low. Many services may fall under AWS Free Tier for certain organizations. You will incur costs for the resources utilized by the AWS Lambda function, as well as any API requests made to the AWS Cost Explorer, and notification deliveries through Amazon SNS. For the latest pricing details, visit the respective pricing pages.

Next Steps

Nonprofits and tax-exempt organizations often find themselves pressed for time. The solution described here enables these organizations to focus on their critical missions while ensuring their AWS accounts maintain the correct tax status by automatically identifying and remediating tax issues.

For further engagement, consider reading this blog post about building confidence here, or check out insights from the Society for Human Resource Management on retention strategies here. Additionally, for resources on onboarding at Amazon, this Glassdoor review provides excellent insights.

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