Is Texas sales tax due on drill team uniform items (leotards, tights, boots, hats) purchased through group orders for students at a public school?

Plain-English summary

A parent whose daughter was on a school drill team asked whether sales tax should be collected on group-order costume supplies (leotards, tights, boots, hats), after the director said tax had to be collected because it was a repeat order to certain vendors.

The Comptroller's answer turns on who is actually buying the uniforms, not on how the order is placed. Schools may only make tax-free purchases of items for the school's own use — so if the school itself purchases and pays for the uniforms (the same way it would for band or sports team uniforms it owns), that purchase is exempt. But drill team uniforms bought and paid for by individual members are taxable, because that's not a purchase for the school's own use. There's a third path: if the school buys the uniforms tax-free from the vendor using a resale certificate, intending to resell them to the drill team members, the school must then collect and report sales tax when it sells the uniforms to the students.

What this means for you

School organizations, booster clubs, and drill/band directors

How you structure the purchase determines the tax outcome. Buying and holding uniforms as school property is tax-free. Passing the purchase directly through to individual student/parent buyers makes it a taxable retail sale — whether that sale is made directly by the vendor to the family, or by the school reselling items it bought tax-free with a resale certificate.

Parents paying for group-order team apparel

If you're paying a vendor directly (even through a school-coordinated group order) rather than the school buying and owning the items, expect sales tax to apply, unless the school itself purchased and paid for the items for its own use.

Accountants and tax professionals

A clean illustration of the "purchase for the exempt entity's own use" line schools must observe, plus the standard resale-certificate mechanic: a school can buy tax-free for resale, but then owes the collection/reporting obligation on the downstream sale to students.

Common questions

Q: Are school-purchased band or sports uniforms tax-exempt?
A: Yes, when the school purchases and pays for them for the school's own use.

Q: Are drill team uniforms bought directly by parents/students taxable?
A: Yes, unless the school itself is the purchaser and payer of record for its own use.

Q: Can a school buy uniforms tax-free and then sell them to students?
A: Yes, using a resale certificate to buy tax-free from the vendor — but the school must then collect and report sales tax when it resells the uniforms to the students.

Q: Can I rely on this letter for my own school's purchasing situation?
A: No. It's based on the specific facts presented to the Comptroller and can be relied on only by the taxpayer it was issued to; other facts, even if similar, may produce a different result.

Citations and references

No specific Tax Code section or Comptroller rule is quoted in the body of this letter; the answer applies the general policy that exempt entities like schools may only buy tax-free for their own use, and that a reseller using a resale certificate must collect tax on its own resale.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9909717L

Original ruling text

September 24, 1999

Subject: Sales tax on drill team uniform supplies

Dear **:

This is in response to your request for a ruling on the following fact
situation and questions:

Should tax be collected on payments for ** ISD drill team
uniforms(e.g. leotards, tights, boots, hat, etc.)? My daughter is a member of
the ** High School **. We purchased through group
orders $** of costume supplies. Our director has been told that he
must collect sales tax on this amount because it is a repeat order to certain
vendors.

Response: Unless purchased and paid for by the school (i.e. band uniforms,
sport team uniforms), the drill team uniforms are taxable when purchased by
individual members of the drill team. Schools may only make tax-free purchases
of items for the school's own use. If purchased by the school for resale to
drill team members, the school may issue a resale certificate to the vendor and
then must collect and report tax on the sales to the drill team members.

Sales tax rules are available on the Internet
.

The State Tax Automated Research system may be accessed on the Internet at:

This opinion is based on the facts presented. Other facts though similar may
provide a different result.

I hope this information answers your questions. If you need additional
information, please call me toll-free at 1-800-531-5441, extension 3-4502. The
direct line is 512/463-4502. You may also write to Tax Policy Division,
Comptroller of Public Accounts. You may also e-mail our tax help section at:

Gilbert Zamora

Tax Policy