Sales tax is a state-by-state issue. There is no national sales tax, which is what makes this such a tricky issue to follow. 50 different sets of rules.
I am in Colorado and we charge sells tax to the parents or kids but not to the teachers as they are tax exempt. We also take the 50% book profit as well I am not sure but have been asked the question as to why we charge tax at the book fairs and the santa gift shop. I though that we were not charged tax on the front end being tax exempt so you need to charge the tax somewhere to get the state their take so it comes from your customers. Maybe we will get the answer from someone.
I'm not in Massachussetts, and I've never coordinated our book fair, but I can tell you that the issue of whether or not the PTO/PTA should charge state sales tax has nothing to do with the group being a non-profit. The exemption from sales tax (assuming it's the same in your state) affects only items your PTO purchases that support your PTO's non-profit purpose. For example, if your PTO purchases books for educational enrichment that could be exempt from state sales tax. The exemption does not, however, extend to purchases made from your PTO by customers. Sales tax is unique for each state, so maybe Mass. has some complicated conditions. You might need to do some research on your own, but hopefully the rep can help.
We had this issue come up a few years ago with our fundraising rep from a national company. I was surprised that the company and the rep accepted our PTO's tax id number as "proof" that they shouldn't be charging us tax on our customer's purchases. I expected the rep, a local, would be more knowledgeable on the tax rules and could give us guidance since they work in the industry every day. Unfortunately she seemed pretty uninformed. Frankly, I think they just wanted to ignore the whole tax issue and most PTO's (including us) are more than happy to oblige. As I understand it, that's not how the state expects it to work. If Scholastic or the PTO collects sales tax, the money must also then be remitted to the state. Obviously, you can't just collect it from your customers and then keep it.
Maybe now Scholastic and/or National PTA is trying to do things according to the rules in the state. You indicate there's some difference if you take your profit in books vs. cash. I don't see how that would have anything to do with whether or not your customers should be paying sales tax. Since you're having these concerns, I would press the Scholastic rep for more information on why you should be charging tax. She should have been trained in this area. If she doesn't sound confident, go above her. If you just ended your book fair and didnt' pass the sales tax on to your customers, you'll have to pay it yourself. If the state requires the tax, that's that. Better to get educated and handle things properly than ignore the rules.
Good Evening. Our school has a PTA that runs Scholastic Book Fairs twice a year (November & April). This year was the first year (some PTA law or something) that we had to charge sales tax...the PTA was not happy about it and neither were the parents. Charging sales tax really cut into the PTA's profit.
I am in Massachusetts, and we DO NOT charge taxes, as specified by the Scholastic contract. The difference is that we take the cash. As I understand it, but I would need to verify, we receive 30% or 35% (somewhere in that area) in profits. This may be because we run three book fairs throughout the year.
Also, in addition to the $ profits, we receive a certain amount of credit that can be used to purchase books. We usually save this until the end of the year as that book fair is a BOGO (buy one - get one free). We don't make any profit from this fair, but it is so worth it.
The difference between what you are doing, and what we are getting, may be due to us holding three and that the last in the BOGO.
If so need more let me know and I'll ask the Book Fair Coordinator.
We run a Scholastic book fair twice a year. We have a new rep for our school, which is in Massachusetts. We just ended our book fair and she is telling us we have to charge our parents tax on their purchases. The Treasurer is arguing that we are a non-profit organization and we cannot charge taxes on a fundraiser. The rep for Scholastic is saying because we take our profit in free books, instead of cash, it is not considered a fundraiser. (We give the books to our classromm teacher’s and reading specialist.) The reason we take the profit in free books is, we get 50% of our sales in free books. If we took the cash we only recieve 25% of our sales in cash. So we get more profit for our Teaacher's to recieve books. (A no brainer right! After all, we are there to raise money and do what ever we can to enrich the school!!)
Does any one else in Massachusetts charge taxes on their book fair? Any one with incite on this would be a great help.
