Wednesday, February 12, 2014

Department of Revenue Determines PTAs Are No Longer Required to Pay Sales Tax on Popcorn Sales

The Department of Revenue has determined that PTAs are no longer required to pay sales tax on popcorn sales and other concessions no matter how often a PTA sells it. They are viewing these activities as fundraising activities, and as such are exempt from sales tax. However, student stores which are ongoing, are still required to pay sales tax. PTAs now will follow the rules on their website for ASB and Booster clubs. Here’s a summary: 

Tax exempt activities include soliciting contributions of and selling goods or services. For example: 
Bake sales 
Car wash receipts 
Concession sales (including popcorn)
Sales of “booster” items (such as periodic T-shirt sales, unless the PTA keeps the T-shirts on hand)
Yearbook sales 

PTAs may purchase the goods they will resell during periodic fundraisers without paying retail sales tax by providing the vendor with a reseller permit. Reseller permits are issued to businesses that make wholesale purchases. PTAs will have to apply to the Department to receive a reseller permit. Applications are available on the Department of Revenue website or you may contact the Department of Revenue.

PTAs may make sales on behalf of for profit businesses to raise funds while providing the opportunity for persons to purchase goods at a discount. The PTA solicits the sales, collects the money, retains a commission or portion of the amount collected, and sends in the order to the business with the balance of the amount collected. While the PTA qualifies for the fundraising exemption, the for profit business does not.

Under this circumstance the PTA must:
Make sure that the for profit business is registered to collect sales tax in Washington. 
Collect retail sales tax on the gross amount of the sale. 
Turn over the collected sales tax to the business for reporting to the Department of Revenue.

The commission amount retained or received by the PTA is exempt from tax.

If you have any questions regarding these changes, please contact the WSPTA office at