Sales tax in Texas:

There are two different pieces of being exempt from sales tax. 1) When are you exempt from paying sales tax on items you purchase? 2) When do you need to collect (and later turn in) the sales tax on items you sell.

Here's a link to the FAQ area on sales tax. www.window.state.tx.us/taxinfo/sales/questions.html

Look at the area for "Exemption Certificates/Exempt Organizations". Sales tax is administered by the Office of the State Comptroller.

Each officially an exempt organization in Texas amy have two one-day tax free sales each calendar year. "one day" means a continuous 24 hour period. Any other sales of taxable merchandise must have sales tax collected and sent it in with the appropriate forms. For a PTO you might claim a day when you have a fundraising sale, or it might be the day all your orders are due from a catalog sales.

You will probably pay tax once a year, and it's not a big deal. It's a simple form. The main thing to understand that not everything is taxable. It's not too bad to figure out. T-Shirts and "things" you sell tend to be taxable. Food is a little more complicated. Something like packaged candy is, something like a spaghetti dinner your volunteers prepared would not be.

[ 05-04-2003: Message edited by: JHB ]</p>

It sounds like your group is already established, so some groundwork has already been laid. First, find out where your group stands and get answers to these questions:

1) Does your group has established an EIN (Employer Identification Number) with the IRS. This is your group's business ID number, like people have a SSN. And make sure THAT number and someone's SSN is the basis for your checking account.

2) What do you have in the way of bylaws and internal processes? (Do you have rules about how cash is handled? Do funding items go for a proper vote?) These are areas you may need to strengthen.

3) Are you a sales tax exempt entity in Texas?( www.cpa.state.tx.us/taxinfo/exempt/xmptsearch.html )

4) Are you incorporated as a non-profit in Texas. (Optional, but highly desireable.)?
www.sos.state.tx.us/corp/nonprofit.shtml

5) Are you are 501(c)(3) non-profit with the Federal Government (IRS)?

This is all part of the business side of running non-profit corporation or non-profit association. Meanwhile, you'll have the whole program side of planning your events and activities.

I'll take a stab at your specific questions either now or later today (leaving right now for swim meet). You'll find the group of Forum members very willing to help you.

[ 05-04-2003: Message edited by: JHB ]</p>

Keep in mind that wrongs can be righted. You learn from your mistakes. PTO is non profit, there should be no sales tax. You may get a lot of your quesions at irs.gov. There are a lot of very helpful Texans that can probably help you more.

Keep a regualar check on this forum it is soooo helpful.

Surely the last people that served kept some kind of records. I keep everything because I assume the next person will be like I was and not know anything! [img]tongue.gif[/img]

I am new to this world of PTO and need help. Several people approached me and wanted me to sign up for president. So here I am scared of doing something wrong. The group that I am following was not very organized. I have a lot of questions that they could not answer (it was the first year they had been seperated from one PTO to two: k-2 and 3-6). Many of you seem to have answers to questions so here goes. Does PTO pay sales tax in Texas? If not how does it work? Is the PTO required to pay federal taxes? If not how does that work? Any help would be greatly appreciated. If any of you have bylaws that work really good I also need help fixing ours.