We received our Official Back to School Kit from National PTA and I noticed a significant difference between the National version of Money Matters and the one that is included in the Washington State PTA Leadership Kit. The issue has to do with accounting for that portion of membership service fees that are collected from members and then sent on as council, state or national portion of the fees. The National PTA book says that those fees should never be included in the PTA’s income, but the Washington State Money Matters says just the opposite, i.e. that the council, state and national fees should be included as income in the PTA’s accounting system. I don’t understand why Washington state would be different from what National PTA is telling us.
The reason Washington State is different is that local units are required by state law to include membership service fees in their income for purposes of the state Charitable Solicitations Act, RCW 19.09. The folks at National PTA are not, of course, aware of the various laws applicable in the 50 states, and their advice appears to be based on federal tax laws. It’s true that the portion of fees sent on to council, state or national are not included in computing income when your PTA completes its 990N, 990EZ or 990 form next month. However Washington PTAs must include all fees received from members in determining whether they have to file under the state Charitable Solicitation Act, and that’s why Washington State PTA advises that all fees – including the portion that is sent on to council, state or National PTA -- be recorded as income on the PTA’s books.