Is a $30 donation to a school booster club, given in exchange for having a name stamped on a commemorative brick placed at the school, subject to Texas sales tax?

Plain-English summary

A high school fine arts booster club runs a fundraising program: individuals can give $30 to the club, and in return get a commemorative brick stamped with the name of a student, alumnus, or other name the contributor requests, placed in front of the school's new fine arts complex. The booster club asked whether these contributions are subject to Texas sales tax. The Comptroller ruled no -- the donation and the resulting brick placement don't involve a transfer of title or possession of tangible personal property TO THE CONTRIBUTOR. The contributor doesn't take the brick home or receive an item of tangible personal property; the brick stays as part of the school's installed walkway or memorial. Because there's no such transfer, the transaction doesn't meet the definition of a taxable "sale" at all, so no sales tax applies to the contribution.

What this means for you

Schools, booster clubs, and nonprofit fundraising groups running commemorative brick/paver programs

Donations exchanged for a name inscribed on a brick, paver, or similar fixture that stays installed on the organization's own property (not given to the donor) are not taxable sales, because nothing tangible transfers to the contributor. This is different from selling a keepsake item the donor takes home, which could be a taxable sale of tangible personal property.

Accountants and tax professionals advising nonprofits and schools

The key fact driving this result is that title/possession of tangible personal property never passes to the contributor -- the brick remains installed at the school. If a similar program instead gave the donor a physical item to keep (a plaque, a mini replica, etc.), the tax analysis could come out differently.

Common questions

Q: Is a donation exchanged for a name on a commemorative brick taxable in Texas?
A: No, per this letter -- because no tangible personal property transfers to the contributor, the transaction isn't a taxable "sale."

Q: Would the answer change if the donor received a physical item to keep?
A: This letter doesn't address that scenario directly, but its reasoning turns entirely on there being no transfer of tangible personal property to the contributor -- a program that gives the donor something to keep could be analyzed differently.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9703352L

Original ruling text

March 7, 1997

Dear ***:

Thank you for your letter dated March 6, 1997, concerning donations given in
exchange for placing a
commemorative brick in front of ** High School's new fine arts complex.

Individuals may give $30.00 to the ** Fine Arts Booster Club. In exchange
for the donation, a brick
will be stamped with the name of the student, alumni, or other name as
requested by the contributor.

The contribution and subsequent placing of a commemorative brick is not the
transfer of title or possession
of tangible personal property to the contributor and does not fall within the
definition of a sale. The
contribution is not subject to sales tax.

This opinion is based on the facts presented in your letter. Different facts
though similar, may result in
different answers.

If you have any questions or need more information, you may call me toll free
at 1-800-531-5441, ext.
50330. The direct line is 512/475-0330. You may also write to Tax Policy
Division, Comptroller of
Public Accounts.

Sincerely,
Bettie Peterson
Tax Policy Division