| TREASURER — Here are a few things to keep in mind as you work:
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PTA’s Financial Records: Do you have to disclose them? It is becoming increasingly common for local PTAs to have their financial records requested by their principal or school board. While it is important for PTAs and administrators to work within an environment of cooperation, a PTA remains an independent organization. A school board or principal does not have the right to demand a PTAs bank statements or financial records. As school districts begin the process of preparing their year-end reports, some PTAs may be contacted about a new accounting regulation known as Government Accounting Standards Board Statement 39 (GASB 39). Under this new regulation, it may appear that some PTAs’ financial information should be consolidated under the school or the district. If your principal or school superintendent feels that your PTA should be consolidated, he or she will ask a PTA to provide its financial information. In most cases, however, a PTA will be able to show that its financial information should not be consolidated by the school or the district. The key question for PTAs regarding this regulation is whether a PTA should be identified as a “component unit” of the “primary government”—meaning the school district. In the case of a school district, a component unit can be a parent group, a booster club, or another organization which provides financial contributions that make a significant impact on the school or the school district. For example, if the school district budget is $50 million and the PTA’s support is $1,000, the PTA would not be considered a component unit of the school. While $1,000 may be significant to the PTA, it is a very small percentage of the total school finds and does not make a significant impact on the school’s ability to function. Some parent groups may be considered a component unit; PTAs, by and large, would not be identified as such. If you have questions regarding this issue please contact: |
| ARTICLES FROM PAST NEWSLETTERS...... |
PTA’S AND SCHOOL BOOKSTORES….IS IT A FUNDRAISER? “In several of our schools we have bookstores that are run by the PTA’s. The stores are open all year long, they sell pencils, paper, etc. Some of the schools use the bookstore as an incentive program for the kids. The children can earn (or buy) bear bucks for things like good behavior, being on time, doing their homework etc. If the PTA purchases items and pay's sell tax on them up front, would this still constitute as a fundraiser?” Tenn. Code Ann. Section 67-6-102(a)(25)(H) is the reference regarding school purchases for resale. When a school or school support group buys goods or services that it will sell to others (including items it will sell to the students through the school store), the school or support group owes the sales or use tax and should pay the tax to its supplier at the time of purchase. If the supplier does not collect the tax, the school or support group owes use tax based upon the purchase price of the items. This is most frequently found when buying from out-of-state dealers for resale. Resale's of tangible personal property or taxable services by schools or school support groups shall not be subject to the tax. Sales through the school store would not be considered a fundraising activity. Any opinion from tax law or regulations given herein is believed to be a correct interpretation. However, the opinions cannot constitute a revenue or letter ruling pursuant to the provisions of Tenn. Code Ann. Sect. 67-1-109. ****************************** Thank you to Kathy Patty, Former Tennessee PTA Treasurer for submitting this question to the TN Department of Revenue for clarification. |
IMPORTANT QUESTIONS FOR YOU TO KNOW…... What constitutes a fundraiser? A fund raising activity is generally defined as the sale of tangible personal property or taxable services from which the organization gains operational funds. How many fundraisers can we have in a year? Tenn. Code Ann. Commonly known as “The Girl Scout Cookie Law”, provides that organizations may hold no more than two temporary sales periods, of no more than thirty days in duration during each year and be exempt from the sales tax on the purchases and sales of the property. However, if the organization holds three or more during the year, the exemption is lost for the first two. Based on Rule 1320-5-1-09, Casual and Isolated Sales, we can have only two sales periods of 30 consecutive days in a year, does that mean we can have several fundraisers within a 30 day period and remain tax exempt? If there is no separation in time from the end of one to the beginning of the next, the 30-day period can include the sale of different items of tangible personal property. Is a golf tournament or a 5-K run a fundraiser? The entry fee is defined as a service and is not taxable. Providing, without cost, of the donated items is not a sale. Therefore, no tax is due, and this event will not count as a fundraiser as long as no personal property is sold. Are box tops, Tyson foods, Campbell’s Soup Labels, Etc. considered a fund raiser? If the company provides a promotional activity that rewards the PTA with a monetary payment based upon the receipt of evidence of their product purchase, the activity is not a sale of tangible personal property and does not count as a fundraiser. **NOTE: When using this mean to receive donations from businesses, you may give the basic information but you must be careful NOT to promote or endorse the specific business as "the best in town". Endorsing specific businesses is considered co-venturing and non- profits are not supposed to do this. Is Domino's Pizza Night, CiCi's Pizza Night or nights where businesses make donations back to the PTA from funds received from patrons on a particular night considered a fundraiser? If the company provides a promotional event night (i.e.: TN PTA Domino's Pizza Night) that rewards the PTA with a monetary payment, the activity is not a sale of tangible personal property and does not count as a fundraiser. Is a carnival a fundraiser if the following apply: (a) a fee is charged to enter the event, (b) fees are charged to participate in the games, (c) and food and beverages are sold? Neither (a) nor (b) are taxable. However, (c) represents the sale of tangible personal property and causes the event to be considered a fundraiser. Are Spaghetti Dinners, Chili Nights, and Special Luncheons or food events where tickets are sold for the purpose considered fundraisers? If not tangible items are sold during the luncheon/dinner, then the event IS NOT considered a fundraiser. However, if the PTA sells tangible items, such as t-shirts or holds a book fair, then the entire event becomes a fundraiser. Can a PTA donate money to the school? Yes, a PTA can donate money to their school. However, since it is important for each PTA unit to keep accurate records by having receipts for purchases—we encourage local PTA’s to obtain a copy of the receipts of items purchased, or at the very least, obtain a signed letter from the Principal listing the items that were purchased with the funds. **NOTE: It isn’t a bad idea to ask your Principal for a “wish list” that at least the Board of Mangers can look over and make recommendation for approved purchases using the PTA funds. |
CONTACT Charlene IF YOU HAVE ANY QUSTIONS AT: Treasurer@tnpta.org |
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| Serving Tennessee's Children...Advocating for everychild.onevoice |
| Current information is available regarding e-Postcard filing requirements. The information may be accessed at the following link: http://www.irs.gov/charities/article/0,,id=169250,00.html You are encouraged to sign up for the EO Update, Exempt Organization's free email newsletter. You may subscribe at www.irs.gov/eo Frequently asked Questions - 990-N |
