The PTO is considered to be a 501(c)(3) organization, exempt from Federal income tax per IRS letter on file dated Sep 23, 1997. Our tax ID is 75-2648391. We have also been registered with the State of Texas as an organization exempt from Texas sales and use tax. What this means is that we do not have to pay income tax, nor do we have to pay sales tax on items that we purchase from others.
However, we DO have to collect sales tax (8.25%) on items that we resell, such as our spirit items and school supplies. The only exception is that as a 501(c)(3) organization we are allowed to designate two calendar days during the year as tax-free days. Cottonwood PTO used its two tax-free days for its August school supply sale. All other sales of school supplies and spirit items are taxable.
Note that there is a second exemption that applies to meals and food products, so we do not have to collect sales tax when selling hot dogs, popcorn, baked goods, etc.
When purchasing tax exempt supplies for the PTO, the buyer may be asked to present a “sales tax exemption certificate.” You can use the form listed above. The buyer must fill out the blank fields and provide the completed form to the vendor.
Please visit the state web site for more info regarding sales taxes in Texas.