Is a nonprofit student store at a Job Corps Center required to collect Texas sales tax when it sells packaged snack food items to enrolled students?

Plain-English summary

A nonprofit student store at a Job Corps Center asked whether it owed Texas sales tax on the packaged snack food items it sells to students enrolled at the center's education facility. Proceeds from the store are deposited into a student welfare fund that supports various student programs at the center.

The Comptroller ruled that items sold in the student store at the center are exempt from sales tax, citing the federal Job Corps statute at 29 U.S.C. § 1707(c).

What this means for you

Job Corps Centers and similar government-affiliated student stores

If you operate a nonprofit student store at a Job Corps Center that sells food items to enrolled students, and proceeds support student welfare programs, this letter indicates such sales can be exempt from Texas sales tax under the federal Job Corps statute — rather than under a general Texas sales tax exemption category.

Food vendors and nonprofit fundraising operations at training centers

This ruling is specific to the Job Corps context. It doesn't establish a general exemption for all nonprofit student stores or all school food sales — the letter's holding rests specifically on the federal statute governing Job Corps Centers, not on a Texas nonprofit or food-sales exemption.

Accountants and tax professionals advising Job Corps-affiliated entities

Note that the exemption here is grounded in a federal statute (29 U.S.C. § 1707(c)), not a Texas Tax Code provision. When advising similar facilities, confirm the entity is actually part of the federal Job Corps program before relying on this letter as persuasive authority.

Common questions

Q: Does a Job Corps Center student store have to collect Texas sales tax on snack food sales to students?
A: No. This letter states that items sold in the student store at the center are exempt from sales tax, citing 29 U.S.C. § 1707(c).

Q: Does it matter that the store's proceeds go into a student welfare fund rather than a general operating budget?
A: The letter describes this fact but does not explain how or whether it affected the exemption analysis; the ruling's stated basis for the exemption is the federal statute, 29 U.S.C. § 1707(c).

Q: What kind of items were covered by this ruling?
A: The letter addresses "an assortment of packaged snack food items" sold to students enrolled at the education facility — it does not address other categories of merchandise.

Q: Can any nonprofit school store rely on this letter to avoid collecting sales tax?
A: No. This opinion is based on the facts presented, and the Comptroller noted that different, though similar, facts might lead to a different answer. It can only be relied upon by the taxpayer to whom it was issued.

Q: What statute did the Comptroller rely on for the exemption?
A: The letter cites 29 U.S.C. § 1707(c), a provision of the federal Job Corps statute, rather than a Texas Tax Code exemption.

Citations and references

• 29 U.S.C. § 1707(c) (cited in the letter as "29 USCA sec. 1707(c)") — federal Job Corps statute cited as the basis for the sales tax exemption.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9206L1179A05

Original ruling text

June 24, 1992

Dear **:

This is in response to your letter dated June 4, 1992 regarding sales tax as it
may apply to items sold in a nonprofit student store located at the CENTER.

The store sells an assortment of packaged snack food items to students enrolled
at the ** Education Facility. Proceeds from this operation are
deposited into a student welfare fund and are used to support various student
programs at the center.

Items sold in the student store located at the CENTER are exempt from sales tax
[29 USCA sec. 1707(c)].

This opinion is based on the facts presented. Different facts, though similar,
might lead to different answers. If you have any questions, feel free to write
or call me at 1-800-531-5441, extension 5-0330, or 512/463-4600.

Sincerely,

Bettie Peterson
Tax Administration Division