Goodwill Retail Services Inc.

“Part x goodwill industries of southeastern wisconsin, inc., goodwill industries of metropolitan chicago, inc., goodwill retail services, inc. And goodwill manufacturing, inc. Have received determination letters from the internal revenue service (irs) indicating that they are exempt from federal income taxes, except for taxes pertaining to unrelated business income under section 501(c)(3) of the internal revenue code. Goodwill talentbridge, llc has been organized as a limited liability company and, accordingly, is not subject to federal or state income taxes. All income tax attributes of the entity are passed through to its sole member, goodwill industries of southeastern wisconsin, inc. The entity is included in the consolidated information return filed by goodwill industries of southeastern wisconsin, inc. The fasb issued guidance related to the uncertainty of income tax positions, which clarifies the accounting for uncertainty in income taxes recognized in an organizations financial statements and requires additional disclosure. Goodwill recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. As of december 31, 2019, goodwill does not believe there is any uncertainty with respect to its tax positions. Goodwill files information returns in the u.s. Federal and the states of wisconsin and illinois jurisdictions. Tax years open under the federal statute of limitations include 2016 through 2019. Tax years open under the state of wisconsin and state of illinois statutes include 2015 through 2019. Goodwill had not historically filed any unrelated business income tax returns but filed in 2018 for federal and the states of wisconsin and illinois jurisdictions. Due to tax reform legislation, these income tax returns will be amended and the organization does not plan to file for 2019, except in wisconsin. Tax years remain open for years in which an income tax return has not been filed. On december 22, 2017, tax reform legislation commonly known as the tax cuts and jobs act of 2017 (the act) was passed; resulting in significant modifications to existing tax law. Furthermore, on december 20, 2019, tax reform legislation commonly known as the taxpayer certainty and disaster tax relief act was passed; resulting in modifications to existing tax law, particularly repealing the taxation of transportation fringe benefits on exempt employers. While there were no material effects on goodwills financial statements as a result of the acts, management continues to evaluate the impact.”

“PART XI, LINE 2D COST OF GOODS SOLD INCLUDED ON REVENUE STATEMENT 3,556,825 IN-KIND CONTRIBUTIONS RECOGNIZED FOR BOOK PURPOSES AT RETAIL VALUE 122,457,535 Reserve Adjustments 400,000 ----------- TOTAL 126,414,360”

“PART XII, Line 2d COST OF GOODS SOLD INCLUDED ON REVENUE STATEMENT 3,556,825 IN-KIND CONTRIBUTIONS RECOGNIZED FOR BOOK PURPOSES AT RETAIL VALUE 122,457,535 ----------- TOTAL 126,014,360”