Sales Tax exemption is controlled by your state. So you need to see what your rules are. (Your state may require that you are a 501(c)(3) with the IRS.) What the exemption means also varies from state to state. For instance, in Texas it means we are exempt from sales tax on most things we purchase and that we can exempt two of our annual fundraisers from collecting/remitting tax. Yes - it's worth it if you qualify.
501(c)(3) is that federal (IRS) status of being recognized as non-profit tax exempt entity. It requires an application with a one-time $750 fee, some pretty hefty paperwork, and that you follow certain rules. But many of us have worked through the process. It is doable.
There's LOTS of information posted in the Forum. do a search using 501 and tax exempt as key words. Look first Roberts Rules, Bylaws, Legal thread, then in the Day to Day PTO Management section. (It's much faster than searching the entire forum.)
Spend some time browsing what's been posted, then come back with specific questions.
Note - the fee just recently was raised from $500. Some of the older posts will reference that amount.
Actually, somebody else had already done all that paperwork for the 501(c)3 about 4 years ago. So I have not personally gone through that process. We did just get a notice that we had to renew our status, which I gave to the accountant and he took care of it. Sorry I can't really help you with that filing...I'm not familiar enough with what needed to be filled out. Also, since my last posting, I did talk to the person who originally took care of everything, about why our PTO never applied for the sales tax exemption. She said she worked at it for about 4 months trying to figure that out, and eventually gave up because it was too involved. I am now seeing why people weren't lining up to take over this treasurer spot---there's a lot of stuff to wade through.
I would be very interested in any information about this subject as well. We are 501(c)3, which, if I understand it, means we're exempt from Federal tax. But not sales tax. I'm wondering if it's even worth it to apply for sales tax exemption. From what I've read, there are so many regulations about it--I can't quite figure it out. Can anybody give me a reason to either apply for it, or forget it?
Hi there,
I was elected treasurer to a PTO that is not big on record keeping.
I have a EIN and know we are not 501(c)3. How do I go about qualifying for tax exempt sales tax?
Please help. I have tons of IRS publications and tons of information. If anyone has been thru process, please walk me thru this!!!!
