Fundraising Events

PISD Fundraising:  All funds collected and handled must be done by PISD employees only.  Non-employees are not allowed to collect, hold, or handle PISD funds.

State Sales Tax

Taxable Status of Purchases

·         Purchases by the school for educational or instruction use or for administrative use necessary to the education function of the school are exempt from tax (office supplies, copy paper, etc.).

·         A school must provide the vendor with a valid signed exemption certificate when claiming state sales tax exempt status.  Exemption certificates do not require numbers to be valid.

·         The District exemption status may not be utilized by parents, patrons, or alumni organizations to secure exemption from sales and excise taxes.  Parent/teacher organizations and Booster Clubs must apply for their own exemption.

·         Items which become the personal property of the student (cheerleader uniforms, band t-shirts, etc.) even though connected with a school or organization, are not exempt from tax.  The exception would be that items which are purchased through budgeted or student activity funds as an award to a student (perfect attendance, honor roll t-shirts) are not taxable.

·         Meals purchased by the school for athletic teams, band, etc. on authorized school trips are exempt from sales tax if the school contracts for the meals.  The school must pay for the meals with a school district check and provide the eating establishment with an exemption certificate.

·         Individual members of the athletic team, band, etc., may not claim exemption from the sales tax on the meals they purchase while on a school authorized trip.

·         An exemption may also be claimed by the school from the state portion of the Hotel Occupancy Tax if the school contracts and pays for the accommodations.

 Collection and Remittance of Sales Taxes

 The school shall collect sales tax on all taxable sales.

·    When imposing sales tax, the school has the option of:  Adding the tax to the item’s selling price – thus, if the selling price of an item were $12.00 and the tax rate were 8.25%, the school would collect $12.99 ($12 x 1.0825) from the buyer for each item sold.  ($12.99 - $12.00 = $0.99 sales tax) or $12.00 x .0825 = $0.99 sales tax on each item.

·    Absorbing the tax in the item’s selling price – thus if the item sold for $12.00 including tax, the school would retain $11.09 and remit $0.91 for sales tax.  If this method is used, divide 1.0 by the sales tax rate of 1.0825 (assuming a tax rate of 8.25%) to get a factor of .9238 (1 / 1.0825 = .9238) to multiply by the sales amount.  Multiply the total sales amount by .9238 to get the amount the school would retain which is the taxable sales amount.  To determine the sales tax amount, subtract the taxable sales from the gross sales $12.00 - $11.09 = $0.91).  Print the Pre-Tax Cheat Sheet.

·    All sales tax collected by the school shall be remitted to the district’s Cashier’s office unless contractual agreements with a vendor stipulate that such taxes should be remitted to the vendor (school picture and book fair sales).

Fundraising Events -  Taxable and Non-Taxable Sales

Tax Free Days - Current tax laws allow a school campus and each organization within that campus to hold two tax-free sales or auctions during a calendar year and each tax-free sale may continue for one day only.  This allows our fundraising groups to sell tangible items such as yearbooks or T-shirts without charging the purchaser for tax.  However, the following restrictions apply:

·    The regulation states that the “sale” occurs when the purchaser takes possession of the item.  Therefore, sales orders can be collected over any period of time, but distribution to the purchaser must occur in a 24-hour period.

·    This does not apply to items of food or food products sold by students under age 18.

Food, meals and snack products such as candy and soft drinks are exempt from sales tax if: served by a public school district, student organization, or parent teacher association during the regular school day or the sale is made by a person under 18 years old who is a member of the organization devoted to the exclusive purpose of education or physical training or by a group associated with the public school and all net proceeds from the sale go to the organization or group for its exclusive use.

Any student group that is recognized by the school and is organized by electing officers (not just participatory captains), holding meetings, and conducting business are bona fide chapters of the school and each group may have two, one-day tax-free sales in a calendar year.  Groups meeting for classroom instruction or team sports are not categorized as bona fide chapters and do not qualify for the tax-free day sales. There is not limit on the number of bona fide groups at a school or school district.   For example:

·         The school district qualifies for a tax-free day

·         The school-wide fundraiser qualifies for a tax free day

·         The Basketball Club qualifies, but the basketball team does not

·         The Cheerleader Club qualifies, but not the cheerleader team

·         The Debate Club qualifies, but debates teams and classes do not

·         The French Club qualifies, but the French classes do not

·         The Senior Class qualifies, but not one particular class that has seniors in it

School and School related organizations need not collect sales tax on the following.

Non-Taxable Sales

·         Yearbook sales when orders are taken over a two-week period but distribution of the book occurs all in a 24 hour period.

·         Vocational group selling popcorn and candy for a two-week period.

·         Ticket sales for events that are sold by the district or by an educational organization

·         If your campus has a school store operated by students: All food items whether prepared (cookies, nachos) or ready to eat (candy, soft drinks) are tax-exempt. All other items are taxable.

·         Ad Sales – in yearbooks, athletic programs, newspapers, posters

·         Admission tickets – athletic, dances, dance performances, drama and musical performances

·         Admission – summer camps, clinics, workshops, project graduation, banquet fees, bids, prom, homecoming, tournament fees, academic competition fees

·         Club memberships

·         Cosmetology Services – (products sold to customers are taxable)

·         Discount/Entertainment cards and books

·         Facility rentals for school groups

·         Food and soft drinks sold at PTA/PTO carnivals

·         Sale of food and soft drinks sold during a regular school day, subject to an agreement with the proper school authorities

·         Vending machine sales

·         and food items sold through fund raising drives by PTA?PTO or students of the school who are under 18 years of age

·         Labor – automotive classes

·         Lost library books or lost textbooks

·         Magazine subscriptions greater than six months

·         Parking permits

·         Services – Car wash

 State and local sales taxes shall be imposed and collected on all sales for:

Taxable Sales - However, any other tangible items such as pencils, paper, gift items, etc. are considered taxable items and should be charged the appropriate tax rate for your campus. 

  • Agenda Books
  • Agricultural Sales
  • Any type of Booster club materials
  • Art  - supplies and work of art
  • Artistic – CD’s, tapes and videos
  • Automotive – parts and supplies
  • Any other items (s) sold as personal property (i.e., school pictures, uniforms, sweaters, shirts, blankets)
  • Books – workbooks, vocabulary, library, (when we are the seller)
  • Book Fairs – all books sold
  • Clothing – school, club, class, spirit
  • Cosmetology products sold to customers
  • Decals, flowers, greeting cards, handicrafts, stationery, candles, calendars, cups, t-shirts sold by a school associated organization during a fund raising drive.
  • Fees for materials when the end product becomes the possession of the student (i.e. vocational projects)
  • Magazines – subscriptions less than 6 months, or magazines sold individually
  • Musical supplies – recorders, reeds
  • Parts – career & technology classes (not to include products used in cosmetology)
  • Personalization on T-shirts, totes, Jackets, etc.
  • Pictures – school, group (if school is the seller)
  • Plants – holiday greenery and poinsettias
  • Rummage, yard, and garage sales
  • Spirit items
  • Supplies  - any sold to students
  • Uniforms – any type to include dance team, drill team, cheerleaders, club shirts, athletics
  • Woodworking crafts – entire sale to include parts and labor
  • Yard signs

Tax Exemption Certificates

 A school district is a political subdivision of the State of Texas and is, therefore, exempt from paying state sales tax and no tax number is assigned.  A tax exemption certification should be completed and sent to a vendor who has request a tax number for his/her records.  

Exception:  Book Fairs – The school shall collect sales tax on all taxable sales.  If the school assumes responsibility for the activity and/or sales, the school is responsible for insuring the tax is paid.  Schools may purchase books tax free for their own use because education organizations have a statutory exemption.  However, when students or other individuals purchase books, the purchase price is taxable and sales tax should be collected at the time of the sale.  Sales tax is due regardless of whether the company makes the sale or the school makes the sale for a company on consignment.  The fact that the sales take place at a location of an exempt entity is immaterial.

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Last modified: 8/07/2012