Members Only grants?

QUESTION:  
Our local unit offers grant program for teachers to provide some additional funding for their classrooms.  Can we require that the teachers be members as a condition of the grant?
   
ANSWER:  
I recommend against such a condition.  Under the Internal Revenue Code, organizations that are tax exempt under either Section 501(c)(3) or (c)(4) of the code are supposed to operate for the benefit of the public at large and not for their members. 

Accordingly there’s a risk that if the IRS were to audit your local unit, the grant program would be viewed asan “inurement” or benefit to the member and not a benefit for the general public. Of course you can certainly encourage the teachers to join, pointing out among other things that more members increases your unit’s capacity to provide the grant program, but I’d recommend against including membership as a requirement. 

PTA liability for accident?

QUESTION:  

Our local unit recently sponsored an event that wasn’t at the school, and unfortunately a child was injured.  Is the PTA still liable for the injuries?  If the PTA is liable will our insurance still cover us even though the event was off school grounds?

ANSWER: 

Whether the PTA is liable for the injuries will depend on exactly what happened.  For example, if PTA volunteers were not providing proper supervision and children ran into each other causing the injuries, the PTA might be liable. 

On the other hand, if the injury resulted from a defect at the facility where the event took place, the owners of the facility are more likely the liable party.  In any event, your question illustrates the importance of the PTA carrying proper insurance. 

If this was a PTA sponsored and organized event and the PTA was in fact at fault, the PTA’s insurance company – and not the PTA’s bank account – will be responsible for paying for any damages, regardless of where the event took place.  

It’s also a good idea when arranging an event such as you describe to make sure that the facility has adequate insurance, and if possible to have the PTA named as an additional insured under the facility’s insurance company.  That way you’re covered regardless of which party is determined to be at fault.

What constitutes a quorum?

QUESTION: 

Under our local unit’s standing rules the Board of Directors is made up of the four elected officers and eleven standing committee chairs.  However due to some people covering two positions and one position being vacant, there are currently only twelve people on the board.  I know that the quorum (the number of people who must be present to conduct business) for a board meeting is a majority of the board members but my question is whether that means a majority of the fifteen positions or a majority of the actual number of people on the board.  A second question is whether the answer would be different if one or more of the positions were shared, such as having co-chairs for the hospitality committee. 

ANSWER: 

You are correct that the Uniform Bylaws provides that “[a] majority of those currently serving on the board shall constitute a quorum.”  Article 5, Section 9(c).  As defined in the glossary at the back of
the Bylaws, “majority” means more than half.  In your local unit’s current situation, with twelve actual people serving on the board, a quorum would be more than half of twelve, or seven.  If/when all positions are filled by different individuals, a quorum would be more than half of fifteen, or eight. Finally, when one or more positions are shared, such as in the example you give, each of those individuals are “serving on the board” and would be counted in determining a quorum.

Student Members' Voting Rights

QUESTION: 

Our local unit has student members, and one of those members is serving as our legislative chair. We’re planning on bringing him to the Legislative Assembly, but want to know whether he can be a voting delegate since he is under eighteen years of age.
 
ANSWER:  

What a great way to introduce students to the legislative process—thanks for sharing the idea.  And yes, he can be a voting delegate, assuming he is enrolled as a member of your local unit and presents a delegate card signed by the local unit president when he checks in at Legislative Assembly. 

WSPTA encourages student memberships, and many PTAs use the PTSA designation (with the “S” standing for “students”) as a way of reflecting that students are a key part of our mission.  The only restriction in the Uniform Bylaws limiting student members is that members who are under age 18 cannot be elected officers.  Otherwise they are entitled to the same voice and vote as any other

member.

Bucket Raffles and Gambling License(s)

QUESTION: 

Our local unit is conducting a raffle as part of our fall fundraising.  The chair has proposed that we conduct it similar to how the Scholarship Basket Raffle is held at the Washington State PTA Convention, i.e. participants can put their tickets in receptacles associated with each of the prizes, and each prize is drawn only from those tickets placed in its associated receptacle.  We hope to sell more than $5,000 worth of tickets so we will need to apply for a license, but if we have, for example, 15 prizes, do we have to get 15 licenses or will one license cover the entire event? 

 

ANSWER:  

There’s actually a subsection of the Washington Administrative Code (WAC)—the state’s regulatory code—addressing this very question, under the heading of “bucket raffles.”  If all of the tickets are good for all of the prizes—i.e. purchasers buy tickets that they can choose to put into the drawing for any of the prizes—then the state Gambling Commission considers the activity to be one raffle, and only one license is required. 

However, if different tickets are sold for each of the prizes then each of the drawings is considered a separate raffle.  You can view the WAC here (look at subsection (6), “bucket raffles”) or obtain more information from the Washington State Gambling Commission via its website (www.wsgc.wa.gov) or by calling 1-360-486-3440.

Donating to Another 501(c)3

QUESTION: 

Some members of our local unit’s board of directors would like to donate $500 to another advocacy organization whose activities include endorsing candidates for public office.  Is this something we can do without jeopardizing our 501(c)(3) tax exempt status?  If not, how is this different from donating to a levy or bond campaign?
 
ANSWER:  

The first step with respect to any proposed expenditure is to review the PTA’s 1023—the form that was submitted to the IRS to obtain the PTA’s tax exempt status.  If the 1023 does not include making donations to other groups as one of its purposes, the form should be updated before any such donations are made. 

The next step is be to review the PTA’s budget and make sure the expenditure is consistent with the budget, i.e. is there a line item for the expenditure or is it within the discretion of the board under the language of the budget or the PTA’s standing rules. 

Finally, you must consider whether there are legal or practical implications to the proposal.  In the case of the donation you described, both the federal tax code (with respect to 501(c)(3) organizations) and the WSPTA Uniform Bylaws prohibit the PTA from supporting candidates for public office.  In order to be consistent with those limitations, the PTA would be satisfied that the receiving organization could keep the donated funds separate from those that are used to support candidates for public office.  

With respect to bond and levy elections, PTAs can support or oppose ballot propositions (as opposed to candidates).  However, such support constitutes lobbying and as a 501(c)(3) organization your PTA can only devote an insubstantial part of your resources to such activities.   If the PTA has filed the Section 501(h) election with the IRS, its compliance with the “insubstantial” limit can be measured based solely on the amount of the contribution, using a formula that allows up to twenty (20%) percent of the first $500,000 of revenue to be expended on lobbying.  On the other hand, PTAs that have not filed the 501(h) election must limit lobbying expenditures to between 3 and 5 per cent and the PTA’s resources, including both financial resources and volunteer time spent on behalf of the PTA. 

Do we need an alcohol permit?

QUESTION: 

Our local unit is planning an auction and we want to include the option of having alcoholic drinks available for those attending because we think it might help increase some of the bidding.  Do we need to have a license, and if so how do we go about getting it?   

ANSWER: 

Before answering your question directly I want to point out Washington state law prohibits open containers of alcohol on school grounds, so this event will have to be held at another location, such as a community center or a local restaurant or club. 

Now to your question.  If you are not having the event at a business that is already licensed to sell liquor or you are not using a caterer with a license, then yes the PTA must obtain a license from the Washington State Liquor Control Board.  The kind of license will depend on how the event is conducted.  If you are selling individual drinks, you will need a “Special Occasion” license.  You can download the application form from the LCB’s website and then mail it to the office in Olympia —please note that you must submit the application at least 45 days before the event.  If you are making drinks available on a hosted basis (i.e. not charging for individual drinks) you need a Banquet Permit, which you can apply for and obtain online. 

One final note.  You may be told that anyone serving the drinks needs to have a Mixologist’s Permit, but that is not accurate.  People who are paid to serve alcoholic drinks in a licensed business establishment are required to obtain such a permit, but the legal requirement does not extend to volunteers operating under either a Special Occasion license or a Banquet Permit.  

Is there a policy regarding PTA email addresses?

QUESTION:  

We’re getting organized for the year and one of our officers raised a question about the advisability of using her personal home email address for PTA purposes. Does Washington State PTA have a policy or guidance on this issue? Also if we do use our own personal email addresses, are they subject to public disclosure

ANSWER: 

The short answer to your question is no—WSPTA does not have a policy about individual PTA leaders using their personal email addresses and including them in their various means of communicating with their members. Rather it’s up to you to decide what works best for their communities.  As you may have noticed, at the state association there are a set of position-based email addresses that are passed along from person to person.  That enables you to contact the WSPTA president at ptapres@wastatepta.org, regardless of who’s currently holding that position, and there are similar addresses for each WSPTA board position.   Many local PTAs follow a similar pattern by creating an email account at one of the free services, Hotmail, Gmail, Yahoo, etc., and then passing it on from year to year. 

While we’re on the subject of email addresses, I do recommend that school district employees not use their school email addresses when they become a member of PTA because some of our newsletters include advocacy information and we wouldn’t want to inadvertently create a problem for them or the school district with the Public Disclosure Commission.  While I certainly understand that they may not wish to make their personal home email addresses available to parents, I’d encourage them to set up a PTA only email address so they can stay informed about what is happening at the local, state and national level of PTA.

As for public disclosure of PTA email addresses, PTAs are private entities and not subject to the state public disclosure laws.  However sometimes PTA information is distributed through school facilities, e.g. websites or email blasts on the district server, hard copy newsletters distributed through what we call “jeans mail”, etc.  If you do decide to use your personal email addresses on such publications, they may become public through public disclosure requests to the school district.

Do we pay tax for prizes/gifts?

QUESTION:  

Our PTA is having a fun run and buying prizes for those children who excel in various categories (fastest, most money raised, etc.).  Do we have to pay sales tax on the gift items that we purchase them?

ANSWER: 

Yes.  When a PTA buys goods for its own use, such as table clothes for a dinner or paper towels for cleaning up, it must pay sales tax just like everyone else.  It’s only when the items are purchased for resale, such as at a student store that the items may be purchased without paying sales tax.  Because you are giving the prizes as incentives for good performance and are not reselling them, they would be subject to the sales tax when you purchase them.  You can learn more about the Washington sales tax and how it applies to PTAs’ activities on the Washington State PTA website under the Leadership Resources tab (user name and password were provided in your Leadership Packet.)

Popcorn Machines and Sales Tax

QUESTION:   

Our PTA is buying a new popcorn machine to enable us to sell popcorn to students and staff as a fundraiser.  Because we will use the machine to make a product we will be selling, can we avoid paying sales tax when we buy the machine using our resale permit?  

ANSWER:  

The PTA must pay sales tax on the popcorn machine because it is for the PTA’s use. The PTA will be selling a product created by the machine, but will not be reselling the machine itself.  Only the items sold--the popcorn and the bags--are being resold, and therefore eligible for a tax free purchase through use of the reseller's permit. 

Also, be aware that if your PTA is selling popcorn on a regular schedule (e.g. every Friday afternoon, the 3rd Thursday of every month), it is required to collect sales tax on the sales.  See the Question of the Week regarding this.

Endorsing/Contributing to District Levy Campaigns

QUESTION:   

Our school district is planning on holding a levy election next spring, and a committee has been organized to campaign in favor of the levy.  Our PTA has historically contributed to such campaigns, and the budget for 2012-13 includes a line item for a contribution.  The committee would like us to make a contribution now that the new fiscal year has begun.  Is this appropriate, or should we wait until the entire membership votes to endorse the levy? 

ANSWER:  

Including a line item in the budget is a necessary step but it is not in and of itself sufficient to justify making the contribution.  A budget creates the authority for the board of directors to expend funds, but the board must actually approve the expenditure before it is made. 

Therefore, because there is a line item for the campaign contribution in the budget approved by the membership, IF the board votes to authorize the contribution, an endorsement vote by the membership is not required to make the contribution.  Of course, an endorsement vote by the membership is the best practice and should be conducted when the timeline permits.

What counts as "professional fundraising?"

QUESTION:   

Our PTA filed its annual report with the Charities Program and the confirmation letter we received stated that if we use  a “professional fundraising” there’s an additional fee of $20.  We had both a book sale and a cookie dough sale that involved commercial businesses—does that count as “professional fundraising”? 

ANSWER:  

First, congratulations on having filed your annual report by the May 31 due date—you may want to make a note for next year that it can be filed early.  We recommend that it be filed at the same time as the PTA’s IRS return is filed, because both filings involve essentially the same
information.

With respect to your question, professional fundraising refers to hiring someone to ask for contributions to your PTA.  For example, it seems like at least once a week—usually during the dinner hour—we receive a call at home from someone asking for a contribution to one cause or another.  While sometimes those calls come from volunteers, most of them are from people who are being paid, and the paid callers fall under the category of “professional fundraising.”  Sales of items such as books or cookie dough, even though the PTA receives part of the proceeds, do not constitute “professional fundraising” for purposes of the Charitable Solicitations act.

Updating a Corporation Renewal With New Officers

Question: 

When I filed our annual corporation renewal with the Washington Secretary of State’s office in February, I noticed that there was a  place to list the officers.  I updated the information then, but of course now our officers are changing—should I file another renewal? 

Answer:

Yes.  The law requires that any nonprofit corporation file an annual report during the month of the anniversary of its incorporation.  That report is required regardless of whether anything has changed since the  preceding year’s report.  In addition, however, you should also update the annual report any time during the year that there’s a change in any of the required information, which includes a change in the officers.  The annual report can be filed online or you can download the form and file it by mail—either way there’s a $10.00 fee.  More information and a link to the applicable forms can be found on the Secretary of State’s website.

Can PTAs have absentee ballots?

QUESTION: 

Our local unit has scheduled a vote on the budget for next year for an upcoming meeting, but we’d like to give the members the option of  voting during the afternoon before the meeting. Is that possible? 

ANSWER: 

No. Until the meeting is actually convened and a motion made to adopt the budget, there’s nothing on which member can vote. Further, what you are proposing is in effect allowing members to cast an absentee ballot, which is prohibited by the bylaws of both the National PTA and Washington State PTA. It’s also possible that there could be a motion to amend the budget as proposed, and if that were passed, any votes cast before the meeting would be negated.

Of course you can –and should—make a draft of the proposed budget available to the membership prior to the meeting, but having them vote on it before the meeting isn’t possible.

Can school staff be on the board and elected to office?

QUESTION:  

Do the Uniform Bylaws prohibit school staff from holding elected officer positions or serving on the Board of Directors?

ANSWER: 

The only requirements for elected officers of a local unit are those set forth in Article 5, Section 6(a) of the Uniform Bylaws:  “Each elected officer of a local unit shall be a member of that local PTA unit prior to taking office and be at least eighteen (18) years of age.”  Similarly Article 5, Section 9(a) requires that board members be members of the PTA in good standing.  Therefore the answer to your question is that there is no prohibition per se against staff members holding either elected officer or board positions, assuming they are members.  Having said that, there are additional considerations to take into account.  First, staff members bring a perspective to the board that is often helpful in setting goals and making decisions about activities.  On the other hand, care would need to be taken so that staff members are not engaging in PTA activities during their paid work time.  Also, there are occasional decisions made by the PTA board that might affect the staff in a more direct personal way, so any staff member who is on the board would have to refrain from participating in such decisions or the discussions around them.  Finally because virtually all PTA decisions affect the school community, it is probably not advisable for the principal of the school with which your PTA is affiliated to be a voting member of the PTA board, simply because virtually every decision by the PTA board will affect the school.  Some PTAs ask the school principal to sit in on board meetings as an ex officio non-voting member of the board, as a means of enhancing communications but avoiding the possibility or appearance of a conflict of interest.

Elected officers in the same house?

QUESTION:  

Our local unit’s Nominating Committee is recommending one person for President and her husband as Treasurer—is that  permitted under the Bylaws?

ANSWER: 

There is no prohibition in the Uniform Bylaws against two or more members of the same household holding offices in the same PTA.  However Article 5, Section 7(a)(4) provides that “[i]In the event two (2) or more members of the same household hold offices in the same local unit or council, only one (1) shall co-sign financial matters.”  In other words, the couple can both be officers but only one of them can be authorized to sign contracts or checks.  The best practice, assuming both are elected, would be to have a decision made at  the first Board meeting as to which (if either) would be on the bank account and authorized to sign contracts, and record the decision in the minutes. You can find the current version of the Uniform Bylaws on the Washington State PTA website.

Can a non-profit save funds for the following year?

QUESTION: 

Our PTA is developing our budget for next year, and it has been suggested that we plan on setting aside a reserve fund that can be used to fund activities in the beginning of the following fiscal year.  As a nonprofit corporation, aren’t we supposed to spend all of the moneys we take in during the same fiscal year?

ANSWER: 

Being a nonprofit means that no individual receives a profit from the association; it does not mean that the PTA can’t accumulate funds from one year to the next.  In fact setting aside sufficient funding to use during the first part of the following fiscal year is a sound and financially prudent practice because it assures that there will be funds for such expenses as purchasing insurance, attending training, and other early-in-the year obligations even though the PTA may not have had time to begin its fund-raising activities.

Handling a Cash Box

QUESTION:
Does the state PTA have a recommendation for how to handle the need for a cash box, i.e. for selling concessions where change may need to be made? Our practice has been that the individuals would personally "stock" the cash box and then reimburse themselves (with two people counting the monies), but some people aren't able to do that with their personal finances. Is it permissible to use PTA funds to provide the necessary cash upfront?

ANSWER:
It’s perfectly permissible to use PTA funds to “stock” the cash box at the beginning of an event. This can be done with a PTA check signed by two authorized signers payable to an individual who then takes the check to the bank and cashes it. There should be a slip indicating how much money and in what denominations were in the cash box at the beginning.

There’s a sample labeled “Cash Box Starting Inventory” on page 25 of the Money Matters section of the Leadership Packet.
-- The starting inventory form should be confirmed by two individuals (other than the one(s) providing the funds) and if a PTA check was used the amount of cash in the box should be the same amount as the check.

--At the end of the event a tally sheet should be completed showing all cash in the cash box at the end of the event, before repaying the source of the initial cash.

--As indicated on the sample ”Money Receipt/Tally Sheet” on the same page of Money Matters, the total amount of cash should be verified by two persons, and then delivered to the Treasurer for deposit, with the Treasurer signing to acknowledge the s/he has received the funds. 

--If the cash box was ‘stocked’ using individual funds, repayment should be by PTA check, or if necessary, by cash with the individual signing a receipt confirming that s/he received the money. Of course the amount repaid should be the same as the amount reflected on the cash box starting inventory. If the cash box was ‘stocked’ by using PTA funds, that should be noted because then the cash receipts from the event would be less than the total cash on hand by the amount of the ‘stocking.’

Regarding Voting Delegates to Convention

QUESTION: 
Our local PTA has funding to send three people to the Washington State PTA Convention, but we’re only eligible for two delegate positions. One of the three who will be attending is also a member of another  PTA, which only has funding to send one person, even though they are eligible to send two delegates. Is it permissible for our ‘third’ representative to be a delegate for the ‘second’ PTA, even though they are not paying for the person’s expenses to attend the convention?


ANSWER: 
The Washington State PTA Uniform Bylaws leave it to local units and councils to decide who will be their delegates, and while it’s typical that the registration fee and other expenses are paid by the unit or council being represented, there’s no requirement to that effect. So yes, your ‘third’ representative can serve as a delegate on behalf of the ‘second’ PTA, assuming of course that the ‘second’ PTA wants that person to represent it. Assuming the answer to that question is yes, the delegate will have to remember that s/he must cast any votes consistent with that PTA’s desires, notwithstanding that another PTA is paying her/his way.

How many people can the nominating committee nominate for a position?

QUESTION:  

I am chair of the Nominating Committee for our local unit.  We have two well-qualified candidates for one of the open positions.  I read in the Nominating Committee section of the Leadership Packet that the Nominating Committee is supposed to select the “best qualified candidate(s) for each position.”  Doesn’t that mean that we should only nominate one person, given that both of them can’t be the “best” candidate? 

ANSWER:  
You are correct that the language of the Leadership Packet may be subject to two interpretations, but the Uniform Bylaws are very explicit on this point:  Article 5, Section 5(b) provides that “The nominating committee shall submit to the membership . . .  the name of one (1) or more candidates for each office to be filled.”  Therefore your committee can put both forward both names for the position, and leave the decision to the members.

Can we grant money/supplies directly to our school?

QUESTION:  

We’ve been told that we shouldn’t grant equipment or supplies directly to the school but instead to should make a grant of money to the school district for use to purchase the equipment or supplies.  I looked in the bylaws and couldn’t find any such prohibition, but if this is true, how can we be sure that the school district will use the funds in the manner we intend them to be used.

ANSWER:  

There is no bylaw addressing this issue; rather what you have described is recommended best practice, based on several considerations.  First, by selecting the equipment the PTA may retain some liability in the case that someone is injured using the equipment.  Second there may be a question in the future as to whether the PTA is also responsible for maintaining the equipment.  Third, the district may have legitimate reasons to want to make sure that the equipment meets its standards for compatibility, safety, etc.  For these reasons, it is best practice to make a grant of funds to the school district, because the school is not a legal entity that is separate from the school district.  To make sure the funds are going to be used as you want them to be used, you can make a restricted grant of funds that can only be used for the specific purposes set forth in the grant document.  You can find a form that can be used to make a restricted grant in the Money Matters section of the Leadership Packet that your local unit received last fall. A copy of Money Matters is also available online under the Leadership Resources tab of the Washington State PTA website (user name and password are provided in your Leadership Packet.)

Is a ticket to the carnival/dinner auction tax deductible?

QUESTION:
Our local unit is having a carnival as both a community event and a fund-raiser. We plan to establish a set fee for entrance, and that will include a dinner (spaghetti, salad, drink and dessert) as well as several carnival games. We are tax exempt under section 501(c)(3) of the Internal Revenue Code, so is the fee that a family pays to attend the carnival deductible by them for federal income tax purposes?

ANSWER:
Possibly, but probably not. When one makes a donation to a qualified 501(c)(3) organization, and in return receives a benefit, only the difference between the amount paid and the fair market value of the benefit may be deducted. For example, if I make a donation to a nonprofit that operates a radio station, and get a tee shirt in return, only the difference between the amount of my donation and the tee shirt is tax deductible. In the case of the carnival, you would need to calculate the fair market value of what the participants will be receiving – dinner and an evening’s entertainment. Keep in mind that it’s the value of the benefit that’s received—not the cost to the PTA of providing the benefit—that’s important. Another way of thinking about it is what you would expect to pay for a comparable event at a commercial establishment. If your fee is significantly above that value, then the difference may be tax deductible.  You would also need to let participants knowin advance that they are making a donation in addition to purchasing entrance into an event. 

Details About the Nominating Committee

QUESTION:

Our local unit is getting ready to elect its Nominating Committee for next year, but in reviewing the Nominating Committee section of the Leadership Packet I couldn’t find anything about the mechanics of conducting the election.  Does the election have to be paper vote, only paper vote if more than 3 want to serve?  Can we vote in our three primary members of the committee and then elect two back-up members or should all be elected at the same time?

ANSWER: 
First congratulations for moving ahead with the nomination and election process—it’s important to have your full slate of officers on board as quickly as possible so they can begin preparing for next year.  As to your question, the Leadership Packet is a great resource, but it’s not the only resource available to you.  In this instance the answer to your questions is laid out pretty well in the WSPTA Uniform Bylaws, Article 5(a)(1):

The nominating committee shall be elected at a general membership meeting of  the local unit at least thirty (30) days preceding the election of officers and shall consist of at least three (3) members and two (2) alternates. The nominating committee members shall be elected by voice vote if there are no more than three (3) nominees and by ballot if there are more than three (3) nominees.  The nominating committee alternates shall be elected by voice vote if there are  no more than two (2) nominees and by ballot if there are more than two (2)  nominees. A plurality vote shall elect. The designated number of candidates receiving the highest number of votes shall be declared the nominating committee. The committee shall select its chair at its first meeting.

Can a unit raise money for a national charity?

QUESTION: 
Some parents and teachers want our local unit to conduct a fundraising drive to raise money for a national charity that is qualified as tax exempt under section 501(c)(3) of the Internal Revenue Code. Is this something  that PTAs can do without jeopardizing our tax exempt status under section  501(c)(4) of the Internal Revenue Code?  Would your answer be different if our PTA converted to a 501(c)(3) status?

ANSWER:
The Internal Revenue Service has recognized that students’ education is enhanced by participating in activities such as you describes because it expands their awareness of and connection to their community, the rest of the country and the rest of the world.  Assuming that promoting education opportunities for students (or words to that effect) was included as one of the PTA’s tax exempt purposes in the IRS 1024 when it applied for tax exempt status, the answer is yes, PTAs can participate in such activities.

If the PTA were tax exempt under section 501(c)(3), than its application for tax exempt status (which would include its statement of purpose) would be on a IRS 1023 form; other than that the answer to the question would be the same.  

Why a PTA Cannot Contribute to "Transportation" Costs

QUESTION:  
When I attended PTA & the Law, I understood that PTAs should not pay for transportation for school field trips or other events because the AIM insurance doesn’t cover injuries incurred arising from transportation. Please explain why a PTA cannot contribute to transportation costs for a school event.

ANSWER: 
The advice provided during the PTA & the Law about paying for transportation via school bus is based on the fact that typically such events use school district buses, and that school districts do not have the legal authority to protect PTAs (or any other private group) from liability.  As a result, the PTA could not be added to the school district’s insurance as an additional insured, and if injuries (or worse) occurred on a field trip involving the school bus and the PTA was sued the PTA would have to hire an attorney (or find one willing to volunteer) to have the PTA dismissed  from the lawsuit.  This could result in a potential cost of several thousands of dollars even if the PTA was in no way at fault in causing the injury. While the risk of injuries and lawsuits may be small, it is real, and is one of many factors that a PTA’s board of directors has to consider. 

Threshholds and Deadlines for State Charities Program

QUESTION:  

 

In the past our PTA filed the IRS 990EZ and we were also registered with the Charities Program because our revenue exceeded $25,000.  However the filing requirements for both have changed and our revenues average less than the new threshold of $50,000.   We filed the IRS 990-N (e-Postcard) for the 2010-2011 year.  Do we have to continue filing the annual update of our registration with the Charities Program, and if  so what is the deadline for filing?

ANSWER: 
You are correct that the filing requirements for both the federal Internal Revenue Service and the Washington State Charities Program have changed.  Because your PTA’s revenue was less than $50,000 you correctly filed the IRS 990-N.  While technically you are no longer required to be registered with the State Charities Program, you can file the optional registration that is free and can be filed online.  Filing this information will keep you current in the Charities Program’s system, and avoid the potential of having to respond to inquiries later from the program if you don’t file.  While the deadline for filing for the 2010-11 fiscal year is May 31st we encourage you to file now so it doesn’t get overlooked, and just think how good it will feel to check that off your “to-do” list. 

PTA School Store Sales Tax?

QUESTION: 
Our local unit has a student store and in the past had not collected sales tax on the items we sold, but we have started doing so since we learned at PTA & the Law that it was required.  What do we need to do to come into compliance with the sales tax rules, and Is there a deadline for doing so?

ANSWER: 
If your PTA made taxable sales during calendar year 2011, you must file a return called the “Retailing and Other Activities Return” with the Washington State Department of Revenue by January 31, 2012.  Unless the  amount of sales tax you owe is more than $1050 (representing sales of between  $10,600 and $15,000, depending on the applicable rate where the sales took  place) you should not owe any penalty or interest for the 2011 tax  year.   You can find information about how to deal with prior years on the recently updated here.
Fundraising & Sales Tax FAQ now available on the WSPTA  website.  The website also includes instructions for completing the 2011  return,

$600+ to a vendor? You need 1099mis!

QUESTION: 
I’m the Treasurer of my local unit, and I recall hearing something about there being a requirement to provide information to the Internal  Revenue Service about vendors we have paid during the past calendar year.   Can you help me figure out what to do? 

ANSWER: 
Yes.  If you paid more than $600 during calendar year 2011 to an individual or an unincorporated business, you must file an IRS Form 1099-MISC.  Instructions about how to complete the form are available on the IRS website; but unfortunately the forms are not available for download.  You can pick them up at a local IRS office, or order the form from the IRS by mail. Hopefully you obtained the necessary information at the time of contracting with the vendor by having  them fill out an IRS Form W-9, but if not you should follow up with the vendor  to obtain the necessary information.