Sorry, this isn't going to be simple.
What you are talking about is
exemption from sales tax in the state of Texas. That is a status for which you have to apply. One of the requirements would be that you are already recognized as a non-profit exempt organization at the federal level (IRS). This is typically referred to as 501(c)(3) because that's the tax code that applies.
Applying for the federal exemption requires a rather complex application and a $750 fee. (But it's doable, many of us have completed it.) This make you a true charitable organization, donations to you are tax deductible, and you don't have to pay federal income tax on money you raise.
So the general order of things is:
- Organize your group and develop bylaws and processes acceptable to the IRS.
- Set up as a non-profit corporation in Texas. (This is a very simple, inexpensive processs. It's optional, but desireable.)
- File your application to become a 501(c)(3) with the IRS.
- Once 501(c)(3) status received, file application with Texas to a tax exempt organization (mostly sales tax).
This cycle will generally take a few months. There is lots of information posted on these forums. So explore and ask questions.
Note - many PTOs don't follow these steps and never formalize. As far as the IRS goes, if your organization brings in
more than $5000 per year (gross, not net) you are supposed to file for 501(c)(3) status. Otherwise, your group is simply a business and should be filing a commercial tax return each April. Many do nothing, file nothing, and simply operate in limbo. Odds are, you won't get caught. But that fact is those "limbo" groups are opeating illegally.
P.S. Important note - if not in Texas, you need to see what it costs/involves in your state to incorporate. Usually it's simple with a small fee. But if not, you may choose not to this. If you do incorporate, do so before filing the 501(c)(3) application. Incorporating creates a new organization legally. If you already had your 501(c)(3) it will NOT transfer.
