Question: Tax Evasion

Our school has asked our PTO to deposit all funds received through the school's book fair into our account and then we write them a check for the total. By doing this, they are not collecting sales tax on the purchases made by students. Is this legal?

Asked by Anonymous

Answers:

Advice from PTO Today

Craig writes:
Unless your school is a for-profit school, it's probably fine. The IRS considers schools to be 501c3 charities, and most states exempt 501c3 charities from sales tax.

Community Advice

Teaching is Job1 writes:
In Pennsylvania, it doesn't matter if you have 501c3 status to be exempt from sales tax. You must look at the product being sold and who the end user of the product is. For instance, Spirit Wear clothing is tax exempt because clothing is tax exempt in PA. However, Book Fair books sold to students and their families are not tax exempt, as books are not tax exempt from sales tax in PA. If the books were sold to teachers for classroom use, then they would be tax exempt.