One of the questions we get asked the most often from our PTA customers is, "What do we do about sales tax?" Fortunately, we know the answer! As PTA members ourselves, we attend summer seminar and other training sessions and we make it a point to keep up to date on all of the requirements from Texas PTA and the Texas State Comptroller's office! We have the documentation available that we can show you or direct you to, but here is a quick and easy way to answer your questions!
Which fundraisers are subject to sales tax? The answer is more simple than you might realize. Cookie dough or other frozen food fundraisers are NOT subject to sales tax since only non-taxable items are sold. Discount card fundraisers are NOT subject to sales tax since the retailer will charge the sales tax when the card is redeemed for taxable goods or services. The only one of our Primo Fundraising options which is subject to sales tax is our Believe Gift Catalog fundraiser. Items sold in these catalogs are subject to tax and therefore sales tax must be charged and remitted to the State. You might be wondering if you can declare the catalog fundraiser as one of your tax-free events for the year? Unfortunately, the answer to that question is no . The Texas Comptroller’s office has ruled that brochure/catalog sales are not eligible for tax-free
declaration by the PTA because, for these sales, the PTA is acting as an agent for the vendor, who is the actual seller. The PTA collects sales tax on the sales price and remits it to the vendor to remit to the Texas Comptroller’s office. Clear as mud, right?
To further confuse the issue, Texas PTA has used the term "designated vendor" to determine who is responsible for the sales tax. The designated vendor (in this case, Believe Kids) sets the price for the merchandise, provides the marketing material and the PTA acts as an agent for Believe Kids and is paid a commission for doing so. Now, the good news is that Believe Kids offers a tax-included catalog for our Texas PTAs which makes the collection of sales tax easy and painless! Believe Kids collects the sales tax and remits it to the state, thus making sure you are in compliance with the rules and regulations as dictated by the State of Texas and Texas PTA! Before doing business with any other fundraising company (and we honestly don't know why you ever would) make sure they are up to speed on the tax issues specific to Texas PTAs!
