Does a qualifying parent-teacher organization (PTO) get the Kansas sales and compensating tax exemption, and how does it differ from a booster club?

Plain-English summary

A school-affiliated organization asked whether it qualified for exemption from Kansas retailers' sales and compensating tax under K.S.A. 79-3606(yy), the parent-teacher association/organization exemption. The Department's answer was "yes" — it recognized the group as a qualifying PTO. (This is the flip side of denials like P-1999-264, where a group failed to show it met the tests.)

The exemption. K.S.A. 79-3606(yy) exempts "all sales of tangible personal property and services purchased by a parent-teacher association or organization, and all sales of tangible personal property by or on behalf of such association or organization."

What qualifies. A "parent-teacher association" is a nonprofit PTA chartered by the National PTA or Kansas PTA and authorized to operate within a public or private school by the school's governing authority; a "parent-teacher organization" is a nonprofit that is functionally equivalent and school-authorized. The group must operate for the benefit and support of an individual school with a defined organizational structure, purpose, and goals; be recognized by the school as a PTA/PTO; and provide programs promoting the education, health, and safety of children — generally the single PTA/PTO in the school, with long-term goals and numerous in-school programs.

What does not qualify — booster clubs. The Department cautioned that "'booster clubs' that operate in connection with schools usually do not qualify." Such clubs are "of a narrow or one-dimensional nature," typically supporting a single "sport, band or drama group," and "do not encompass the broader objectives of PTAs or PTOs" — even if made up of parents, students, and businesses interested in the school. For this exemption, a "school" is defined as an institution meeting the compulsory-attendance provisions of K.S.A. 72-1111.

The result. "Based solely upon the information and documents you submitted, it is the opinion of the Kansas Department of Revenue that your organization is a PTO," so it is exempt under K.S.A. 79-3606(yy). The Department enclosed an exemption certificate the organization could copy and issue to retailers.

What this means for you

Qualifying PTAs and PTOs

If your group operates for a single school with a defined structure and broad programs promoting children's education, health, and safety, and the school recognizes it, you can qualify for the K.S.A. 79-3606(yy) exemption on your purchases and sales. Get the Department's recognition, then issue exemption certificates to your vendors.

Booster clubs typically fall outside the exemption

A club focused on one sport, the band, or a drama group is generally too narrow to qualify as a PTA/PTO, even if parents and businesses are involved. Don't assume booster-club purchases are exempt under (yy).

The exemption covers sales and compensating (use) tax

The recognition here reached both Kansas retailers' sales tax and compensating (use) tax. Keep the exemption certificate on hand and issue copies to retailers as needed to make qualifying purchases without tax.

Common questions

Q: Is a parent-teacher organization exempt from Kansas sales tax?
A: Yes, if it qualifies. The Department recognized this PTO as exempt under K.S.A. 79-3606(yy), which covers a qualifying PTA/PTO's purchases and its sales of tangible personal property.

Q: What makes a group a qualifying PTA/PTO?
A: Operating for the benefit of an individual school with a defined structure, purpose, and goals; being recognized by the school; and running programs promoting children's education, health, and safety.

Q: Do booster clubs get the same exemption?
A: Usually not. Booster clubs supporting a single sport, band, or drama group are too narrow and one-dimensional to qualify as a PTA/PTO under this exemption.

Citations and references

• K.S.A. 79-3606(yy) — exempts purchases and sales of tangible personal property by a qualifying parent-teacher association or organization; the basis for recognizing this PTO as exempt from sales and compensating tax.
• K.S.A. 72-1111 — Kansas compulsory school-attendance provision; used here to define "school" for purposes of the PTA/PTO exemption.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: P-1999-260

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

December 9, 1999

XXXX
XXXXXXXXXXX
XXXXXXXXXXXXX
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Dear XXXXXXXXXX:

The purpose of this letter is to respond to your letter dated November 23, 1999. In it, you ask if the XXXXXXXXXXXXXXXXXXXXXXXXXXXXX qualifies for exemption from Kansas retailers’ sales and compensating tax pursuant to K.S.A. 79-3606(yy). The answer is “yes.”

K.S.A. 79-3606(yy) exempts from Kansas retailers' sales tax "all sales of tangible personal property and services purchased by a parent-teacher association or organization, and all sales of tangible personal property by or on behalf of such association or organization;"

For purposes of the exemption extended at K.S.A. 79-3606(yy), “parent-teacher association” shall mean a nonprofit parent-teacher association chartered by the National PTA or Kansas PTA. PTAs are authorized to operate within a public or private school by the governing authority of the school. A “parent-teacher organization” means a nonprofit parent-teacher organization that is functionally equivalent to a “parent-teacher association” that is authorized by the governing authority of a public or private school to operate within the school.

The PTA or PTO must operate for the benefit and support of an individual school with a defined organizational structure, purpose, and goals; and is recognized by the school as a PTA/PTO. A PTA/PTO provides programs within a school promoting the education, health and safety of children. Generally, there is only one PTA/PTO within a school and they would have long-term goals and objectives and numerous programs operating within the school.

Other organizations such as "booster clubs" that operate in connection with schools usually do not qualify for exemption. These clubs or associations are organized and operated for the benefit of clubs or organizations that are recognized school organizations but are of a narrow or one-dimensional nature. They are typically operated to support a sport, band or drama group. They do not encompass the broader objectives of PTAs or PTOs. Booster clubs or other types of clubs that support sports, bands, or other extra-curricular activities do not qualify as PTA’s or PTO’s, even though they may be composed of parents, students, businesses, and others who are interested in the school or in certain facets of the educational process.

For purposes of this exemption, a school is defined as an institution which meets the compulsory attendance provisions of K.S.A. 72-1111.

Based solely upon the information and documents you submitted, it is the opinion of the Kansas Department of Revenue that your organization is a PTO. Therefore, the department recognizes your organization is exempt pursuant to K.S.A. 79-3606(yy).

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.

I have enclosed a copy of an exemption certificate for purchases by your organization. You may duplicate this certificate and issue to retailers as needed.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC:mdc

Date Composed: 12/20/1999 Date Modified: 10/10/2001

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