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?
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.)