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State Sales Tax
Taxable Status of Purchases
All items purchased by a public school for the school’s own use automatically are exempt from sales tax if the items purchased relate to the educational process.
A school must provide the vendor with a valid signed exemption certificate when claiming state sales tax exempt status. Exemption certificates do not require numbers to be valid.
The District exemption status may not be utilized by parent, patron, or booster organizations to secure exemption from sales and excise taxes. Parent/teacher organizations and booster clubs must apply for their own exemption.
Tax-Free Days
Each school district, each school and each bona fide chapter of each school is allowed to have two, one-day tax-free sales each calendar year.
Exception: Book Fairs – The school shall collect sales tax on all taxable sales. If the school assumes responsibility for the activity and/or sales, the school is responsible for insuring the tax is paid. Schools may purchase books tax free for their own use because educational organizations have a statutory exemption. However, when students or other individuals purchase books, the purchase price is taxable and sales tax should be collected at the time of sale. Sales tax is due regardless of whether the company makes the sale or the school makes the sale for a company on consignment. The fact that the sales take place at a location of an exempt entity is immaterial.
Taxable Status of Sales
School and school related organizations need not collect sales tax on the following:
Non-Taxable Sales
• Ad sales – in yearbooks, athletic programs, newspapers, posters
• Admission tickets – athletic, dances, dance performances, drama and musical performances
• Admission – summer camps, clinics, workshops, project graduation, banquet fees, bids, prom, homecoming, tournament fees, academic competition fees
• Club memberships
• Discount/Entertainment cards/books
• Facility rentals for school groups
• Food and drinks sold at PTA Carnivals
• Sale of food and soft drinks during a regular school day, subject to an agreement with the proper school authorities
• Vending machine sales
Non-Taxable Sales (continued)
• Meals and food products, including candy and soft drinks, served in an elementary or secondary school during the regular school day
• Candy and food items sold through fund raising drives by PTA or students of the school who are under eighteen years of age
• Labor – automotive, upholstery classes (parts are taxable)
• Magazine subscriptions greater than six months
• Park permits
• Services – car wash, cleaning
State and local sales taxes shall be imposed and collected on all sales for:
Taxable Sales
• Art – supplies and works of art
• Artistic –CDs, tapes, videos
• Athletic – equipment and uniforms’
• Auction items sold
• Automotive – parts and supplies
• Band – equipment, supplies, patches, badges, Uniform sales or rentals
• Book Covers
• Book Fairs – all books sold
• Brochure items
• Calculators
• Calendars
• Candles
• Clothing – school, club, class, spirit
• Computer – supplies, mouse pads
• Cups –[ glass, plastic, paper
• Decals
• Directories – student, faculty
• Fees – copies, printing, laminating
• Flowers – roses, carnations, arrangements
• Greeting cards
• Handicrafts
• Horticulture items
• Hygiene Supplies
• Lumber
• Merchandise, tangible personal property
• Magazine – subscriptions less than 6 months
Taxable Sales (continued)
• Magazines – when sold individually
• Musical supplies – recorders, reeds
• Parts – career and technology classes
• Parts – upholstery
• PE – uniforms, supplies
• Pennants
• Pictures – school, group (if school is the seller)
• Plants – holiday greenery and poinsettias
• Rentals – equipment of any kind
• Rentals – uniforms of any kind, towels
• Repair to tangible personal property (i.e., computer repair, house remodeling)
• Rings and other school jewelry
• Rummage, yard, and garage sales
• Safety supplies
• School publications – athletic programs, posters
• School publications – brochures
• School publications – reading books
• School publications – yearbooks
• School Store – all items (except food)
• Science – science kits, boards, supplies
• Spirit items
• Stadium seats
• Stationery
• Supplies – any sold to students
• Uniforms – any type to include PE, dance team, drill team, cheerleaders, athletic, club shirts
• Vending – pencils and other non-edible supplies when the school services the machine
• Woodworking crafts – entire sale to include parts and labor
• Yard signs
Collection and Remittance of Sales Taxes
When imposing sales tax, the organization should:
• Absorb the tax in the item’s selling price – if the item sold for $2.00 including tax, the school would retain $.84 and remit $0.16 for sales tax. If this method is used, divide the total sales by 1.0825 (assuming tax rate of 8.25%) to find the taxable sales. To determine the sales tax amount, subtract the taxable sales from the gross sales.
100 items x $2.00 = $200 gross sales
$200./. 1.0825 = $184.76 taxable sales
$200-$84.76 = $15.24 sales tax to be remitted
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