Comptroller's Office: PTAs, Like Any Seller, Must Collect Sales Tax
PTA organizations across the state are required to collect a sales tax— a law the Maryland PTA evidently wasn't aware of, according to The Capital Gazette.
Incoming Maryland PTA president Ray Leone told the Annapolis-based newspaper that if the state were to collect back taxes from the PTAs, many of them would go bankrupt.
Caron Brace, a spokeswoman for Maryland Comptroller Peter Franchot, said the law isn't new—and isn't special to PTAs.
"Sales from the PTA are no different from any organization that sells something." Brace said. "Technically everytime you sell something, you collect a sales tax."
The spokeswoman pointed out that the comptroller's office wasn't targeting PTAs, but instead responded to an email inquiry.
"Someone contacted the office general email and asked about PTAs," she said. "All we did was respond. This is not anything where we went after them. We were reacting."
Brace declined to comment on whether the PTAs will face audits or collections.
The Capital reports that the Maryland PTA sent out an email to all PTAs this month asking them to start collecting taxes. Leone told the paper that the group plans to ask the state to change its taxation requirements.
Maryland PTA representatives were not available for comment on this blog post.
Information101
8:14 am on Tuesday, November 27, 2012
Just what is the quoter from Maryland PTA saying about not getting a memo from the state related to Maryland sales tax? In the Maryland PTA Cash Encounters which is the financial how to booklet sent to every PTA in Maryland from Maryland PTA (and used in trainings) it says clearly...
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TAXES, TAXES, TAXES
PTAs in Maryland are exempt from paying FEDERAL INCOME TAX on most income. PTAs in Maryland ARE NOT EXEMPT from paying Maryland State Sales Tax.
Paul T.
8:55 am on Tuesday, November 27, 2012
"PTAs in Maryland are exempt from paying FEDERAL INCOME TAX on most income. PTAs in Maryland ARE NOT EXEMPT from paying Maryland State Sales Tax."
They could probably qualify for a Maryland Sales & Use Exemption Certificate. That means they don't pay sales tax on what they buy; however, they would still have to collect and remit sales tax on all products that they sell to others.
Information101
5:32 pm on Tuesday, November 27, 2012
Looks like the left hand did not know what the right hand was doing. Consistent training from Maryland PTA needs to happen and avenues to properly train PTAs should widen. Maryland PTA also needs to take initiative to clear up questions sooner rather than later. Put money back into supporting local units first not last.
Information101
5:33 pm on Tuesday, November 27, 2012
Are local parent-teacher associations exempt? (Comptroller Maryland Website)
Yes and no. Tax should not be collected on sales of goods to PTAs and similar groups associated with non-public schools if the property will be donated to an exempt school. Local PTAs may use their school's exemption certificate when claiming exemptions. Tax should be collected, however, on sales of items to PTAs that they will use in their operations, but which are not donated to schools.