Can each school-sponsored student organization within a school district hold its own two one-day tax-free sales or auctions each year?

Subject

School District, Schools, And School-Sponsored Student Organizations Each Get Two One-Day Tax-Free Sales Per Year

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9310L1278D01

Plain-English Summary

A school district asked the Comptroller about recent changes to Tax Code Section 151.310, which allow organizations listed in subsections (a)(1) and (a)(2) to each hold two tax-free sales or auctions of one day's duration per year. The Comptroller confirmed that this two-day-per-year allowance applies separately at each organizational level: the school district itself, each individual school within the district, and each school-sponsored student organization within each school. The letter gives examples of qualifying student organizations: FFA, Spanish Club, Drama Club, and Student Council (the subject line of this letter also references choir and senior class as similar school-sponsored groups).

The letter adds one coordination rule: if two or more of these organizations join together to hold a single tax-free sale, that combined sale counts as one of the two annual tax-free sale days for each participating organization — not just one day total shared among them.

What This Means For You

If you run or advise a school district's business office: The district itself, every school in the district, and every school-sponsored student club or group at each school (band, choir, drama club, FFA, student council, senior class, etc.) each independently get their own allotment of two one-day tax-free sales or auctions per year. These allotments are not pooled or shared across the whole district — they belong to each organization separately.

If multiple student groups want to run one fundraiser together: You can combine forces for a single tax-free sale, but be aware that doing so uses up one of each participating organization's two annual tax-free days, not just one day shared between them. Plan accordingly if any of the groups involved want to hold a second, separate tax-free sale later in the year.

Note on scope: This letter is brief and does not define what qualifies as a "school-sponsored" organization beyond the examples given, nor does it describe the mechanics of what counts as a "sale" or "auction," or how the one-day duration is measured. It answers only the specific question the district asked about who gets the two-day allowance and how combined sales are counted.

Q&A

Q: Does every student club at a school get its own two tax-free sale days, or does the whole school share one set of two days?
A: Each school-sponsored student organization within a school gets its own two one-day tax-free sales or auctions per year — separate from the two days the school itself gets, and separate from the two days the school district itself gets.

Q: What kinds of student groups count as "school-sponsored student organizations" under this letter?
A: The letter gives FFA, Spanish Club, Drama Club, and Student Council as examples (the ruling's subject line also lists choir and senior class as similar organizations).

Q: If the Drama Club and Student Council team up to hold one joint tax-free sale, does that use up one day for each club or just one day total?
A: One day for each. The letter states that if two or more organizations combine to hold a tax-free sale, each organization is considered to have held one of its own tax-free sales — the joint event counts against every participant's individual two-day allowance.

Original ruling text

October 28, 1993

Dear *****:

Thank you for your recent letter regarding the recent changes to Tax Code
Section 151.310 allowing organizations listed in (a)( 1) and (a)(2) to have two
tax-free sales or auctions of one day duration each.

The **** school district, each school in the district, and each school sponsored
student organization within each school may hold two one-day tax-free sales or
auctions each year. Examples of school sponsored student organizations within
a school include FFA, Spanish Club, Drama Club, and Student Council. If two or
more organizations combine to hold a tax-free sale, each will be considered to
have held such a sale.

This opinion is rendered based on the facts you submitted. Other facts,
though similar, may yield different results.

If you have questions or need more information, please call or write. You
may reach me by calling toll free, (800) 531-5441 (ext. 34680). My direct
line number is (512) 463-4680. The number for FAX transmissions is (512)
475-0900. You may write to me in care of Tax Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

NOTE: Previous Accession Number 9311195L.2 and/or 9311195L