Saturday, October 1, 2011

Sales Tax on Items for Re-Sell (ie., Spirit Wear)

We’re having our annual spirit wear sale, and the vendor insisted that we had to pay sales tax when we purchased the items to resell.  I later heard that we could have avoided paying sales tax because we’re a non-profit.  Is that true, and if so is there any way to get back the sales tax that we weren’t legally obligated to pay in the first place?
First, it’s not true that non-profits do not pay sales tax when they purchase taxable items for their own use.  Thus if you’re buying a notebook to keep a copy of your PTA’s legal documents, or tablecloths for a PTA dinner, you pay sales tax like anybody else.  However, when you buy items to resell, such as the spirit wear you mentioned in your question, you can avoid paying the sales tax by obtaining a Reseller’s Permit from the Washington Department of Revenue.  The permit is easy to obtain—just click here and follow the directions.  And there’s more good news—you can also obtain a refund of the tax you paid from the Department of Revenue.  You can learn more about state tax laws and how they apply to PTAs by attending one of the many upcoming PTA & the Law workshops being held this month, and by checking out the Frequently Asked Questions available on the Leadership Resources section of the WSPTA website.