Is a parent-teacher association or organization exempt from Kansas sales and compensating tax on both its purchases and its sales?

Plain-English summary

A nonprofit parent-teacher organization asked whether it is exempt from Kansas sales tax. The Department ruled it is fully exempt — on both what it buys and what it sells.

The exemption. "Effective July 1, 1998, K.S.A. 79-3606(yy) exempts all purchases of tangible personal property and services by a parent-teacher association or organization, and all sales of tangible personal property by or on behalf of such association or organization." This is a two-sided exemption: it covers the group's purchases and its sales.

The organization. The requester was described as "a nonprofit 501(c)(3) association" chartered by a parent body that provides "support, printed materials, training and information to local units," funded mainly by member dues and by sales of tangible personal property.

The holding. "It is the opinion of the Kansas Department of Revenue that the [organization] is exempt from sales and compensating pursuant to K.S.A. 79-3606(yy). Your organization is not required to tax sales of tangible personal property and taxable services or pay sales tax or compensating tax on items consumed." The Department listed examples that are covered: "sales of jewelry, purchase of office supplies and equipment and the renting of motel rooms, purchase of banquet food that is consumed in providing conferences and conventions you sponsor."

What this means for you

Parent-teacher associations and organizations (PTAs/PTOs)

Under K.S.A. 79-3606(yy), a PTA/PTO is exempt both when it buys and when it sells. You do not pay Kansas sales or compensating tax on property and services you purchase and consume, and you do not collect tax on your sales of tangible personal property.

The exemption is unusually broad

Many Kansas nonprofits get no blanket exemption, but the Legislature specifically exempted parent-teacher associations here. The Department's examples — jewelry sales, office supplies and equipment, motel rooms, and banquet food for conferences you sponsor — show how wide the coverage is.

Keep documentation of your status

Because the exemption is specific to parent-teacher associations and organizations, keep records showing your organization is one, and follow the Department's procedures for claiming exemption on purchases.

Common questions

Q: Is a PTA or PTO exempt from Kansas sales tax?
A: Yes. K.S.A. 79-3606(yy) exempts all purchases of tangible personal property and services by a parent-teacher association or organization and all sales of tangible personal property by or on behalf of it.

Q: Does the exemption cover both purchases and sales?
A: Yes. The Department confirmed the organization neither taxes its sales of property and taxable services nor pays sales or compensating tax on items it consumes.

Q: What kinds of transactions did the Department say are covered?
A: It gave examples including sales of jewelry, purchases of office supplies and equipment, renting motel rooms, and buying banquet food consumed at conferences and conventions the organization sponsors.

Citations and references

• K.S.A. 79-3606(yy) — effective July 1, 1998, exempts all purchases of tangible personal property and services by a parent-teacher association or organization, and all sales of tangible personal property by or on behalf of such an association. The Department applied it to hold the requesting PTA/PTO exempt from both sales and compensating tax.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-12

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

February 5, 1999

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Dear XXXXXXXXXXXX:

The purpose of this letter is to respond to your letter dated November 9, 1998.

Effective July 1, 1998, K.S.A. 79-3606(yy) exempts all purchases of tangible personal property and services by a parent-teacher association or organization, and all sales of tangible personal property by or on behalf of such association or organization. The XXXXXXXXXX is a nonprofit 501(c)(3) association chartered by the XXXXXXX. You provide support, printed materials, training and information to local units. The bulk of your funding comes from the dues of XXXXXXX and sales of tangible personal property.

It is the opinion of the Kansas Department of Revenue that the XXXXXXX is exempt from sales and compensating pursuant to K.S.A. 79-3606(yy). Your organization is not required to tax sales of tangible personal property and taxable services or pay sales tax or compensating tax on items consumed. This would include and would not be limited to sales of jewelry, purchase of office supplies and equipment and the renting of motel rooms, purchase of banquet food that is consumed in providing conferences and conventions you sponsor.

This private letter ruling is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to make an accurate determination by the department, this ruling is null and void. This private letter ruling will be revoked in the future by operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or a published revenue ruling, that materially affects this private letter ruling.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 02/16/1999 Date Modified: 10/11/2001

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