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

Plain-English summary

A parent-teacher association asked about its Kansas sales and compensating (use) tax status. The Department gave a broad exemption.

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." The exemption thus runs in both directions — the PTA's buying and the PTA's selling.

The holding. "Based solely on the information supplied," the Department concluded that the PTA "is exempt from sales and compensating pursuant to K.S.A. 79-3606(yy)." Concretely: the organization "is not required to tax sales of tangible personal property and taxable services or pay sales tax or compensating tax on items consumed." So the PTA does not collect tax on the items it sells, and it does not pay sales or use tax on the things it buys and uses.

Bottom line: a parent-teacher association is exempt on both sides of the counter — no sales or compensating tax on its purchases and consumed items, and no requirement to charge tax on its sales of tangible personal property (or taxable services).

What this means for you

Parent-teacher associations and organizations

You can buy the supplies and services you use without paying Kansas sales or compensating tax, and you do not have to collect tax on the tangible personal property you sell (for example, at fundraisers). Provide vendors a completed exemption certificate so they can honor the exemption at the point of sale.

Schools and PTA volunteers running fundraisers

Because the exemption covers "all sales of tangible personal property by or on behalf of" the PTA, ordinary fundraiser merchandise sales handled by or for the PTA are not taxed. Keep documentation tying the activity to the PTA so the "by or on behalf of" condition is clear.

Watch the boundaries

The exemption is specifically for parent-teacher associations/organizations. A related but separate entity, or an activity not conducted by or on behalf of the PTA, may not be covered. Confirm the seller of record really is the PTA before treating a sale as exempt. (Compare P-1999-185, where a PTA's own sale of admission tickets — a taxable service rather than tangible personal property — was treated as taxable.)

Common questions

Q: Does a PTA pay Kansas tax on what it buys?
A: No. Under K.S.A. 79-3606(yy) the PTA is not required to "pay sales tax or compensating tax on items consumed," so its purchases of property and services are exempt.

Q: Does a PTA charge tax on what it sells?
A: No, for sales of tangible personal property by or on behalf of the PTA. The Department said the PTA "is not required to tax sales of tangible personal property," effective July 1, 1998.

Q: Does the exemption cover use (compensating) tax too?
A: Yes. The ruling is a multitax determination — the PTA owes neither Kansas retailers' sales tax nor Kansas compensating (use) tax on items it consumes.

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 sole basis for the exemption.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-194

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

September 8, 1999

XXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXX
XXXXXXXXXXXXXXX

RE: XXXXXXXXXXXXX

Dear XXXXXXXX:

The purpose of this letter is to respond to your letter received by this office on August 12, 1999.

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.

Based solely on the information supplied by you, it is the opinion of the Kansas Department of Revenue that the XXXXXXXXXX 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 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

Date Composed: 09/13/1999 Date Modified: 10/10/2001

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