PTA and Taxes: Filing an Extension

Question:

I know that the deadline for filing our unit's federal tax return is November 15th, but I'm not sure we will have all the information we need. Is it possible to obtain an extension of time, and if so, how do I go about it?

Answer: 

You are correct that the deadline for nonprofits (which obviously includes all PTAs!) to file their annual federal tax return for the 2010-11 fiscal year is November 15th.  This is a postmark date, which means that the return (if filed by mail) must be postmarked no later than that date.  The good news is that the filing requirements have changed so that many PTAs that previously were required to file a paper return no longer have to do so.  If your PTA “normally” receives less than $50,000 in revenue, the PTA must file the 990-N electronic return. 

However PTAs with revenue “normally” between $50,001 and $200,000 must file either the 990EZ return or a full 990, and those whose “normal” revenues exceed $200,000 must file the 990.   To determine your PTA’s “normal” revenue, average the revenue for 2010-11 with the revenue for the two previous years, and remember than you can deduct the portion of your membership dues that you forward on to council, the State PTA and National PTA when making these calculations. 

Regardless of which form must be filed, the due date is November 15th--however if you do not believe that you can meet that deadline, you can file for an automatic three-month extension using IRS Form 8868.  New this year, you can both complete and file the application online for free.  Both the form and instructions are available here.  However the extension must be granted before the due date, so if you think you may need an extension, file it now!

Details For Taking Minutes

Question: 

We have several questions about the minutes. First, how detailed should they be--should every comment be recorded and attributed to the speaker by name? Should the votes on a motion include names of who voted and how they voted? Finally, is it necessary to have the minutes of a previous meeting read aloud and have a formal motion to approve them?

Answer: 

The following is a summary from Roberts’ Rules of Order, which under Article 15 of the Uniform Bylaws is the parliamentary authority for issues not specifically addressed in the Bylaws or state law.  The minutes of a meeting—whether it’s a meeting of a committee, the Board or the general membership—become the official record of actions taken at the meeting once they have been approved.  Thus it’s important that any decisions be recorded accurately.  However recording each and every comment made during discussion is neither required nor is it a good practice, for several reasons.  First, it puts an unnecessary burden on the Secretary.  Second, people often say things in a discussion to draw out different points of view and including statements that may not accurately represent their own personal views.  Third, as we’ve all learned through email it’s difficult to capture the tone and flavor of an individual's comments in black and white, and there’s a significant risk that subsequent review of the minutes will generate a debate about what the person meant to say rather than the words s/he actually used, using time that could be put to a more productive endeavor. 

Similarly, the results of a vote on a motion should also be recorded, but not how individual participants voted.  There are two exceptions.  If someone abstained, particularly if the abstention is because of a real or perceived conflict of interest, that person’s name and the fact that s/he abstained should be recorded.  The other exception is when someone feels strongly that his/her dissenting viewpoint should be reflected in the record, that individual should be offered the opportunity to submit a dissenting statement to be added to the minutes prior to the time they are submitted for approval.  

As for approval of minutes of a prior meeting, if a draft of the minutes has been circulated in advance, or if written copies are available for everyone present, it is not necessary to read them aloud, although the president or chair may direct that this happen, and should do so if one or more persons present request that it be done.  A formal motion to approve the minutes is not necessary.  Rather after those present have had a chance to review the draft, the chair or president can ask if there are any corrections or additions to the minutes as presented.  Any noncontroversial changes—spelling errors, for example—can be made by consensus, and the chair or president can then announce that the minutes stand approved as presented or as amended, whichever is appropriate.  However, if there is disagreement as to the accuracy of one or more points in the minutes, a motion should be made spelling out how the draft minutes should be changed, and following discussion there should be a vote on whether to make the specific change(s) proposed in the motion.  Following all such motions there should be a motion to approve the minutes with any change(s) approved during the process. 

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

Question: 

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?

 

Answer: 

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.  

What to do if your elected officers resign?

Question: 

Two of our four officers have submitted their resignations  unexpectedly, each for perfectly understandable personal reasons.  How do we go about replacing them?

Answer:  

First, thanks for hanging in there during a difficult period.  Now to answer your question, under Article 6, Section 5(e) of the Uniform Bylaws, vacancies in an office can be filled by appointment by the executive committee, and the person appointed can serve until the next general membership meeting, at which time nominations should be taken from the floor and an election held.

Differences in Money Matters: WSPTA and National PTA

Question: 

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.

Answer:  

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.

Guidelines for General Membership Meetings

Question: 

We're trying to establish our general membership meeting schedule for the year--are there any rules or guidelines we should be following?

Answer: 

Meetings are governed by Article 5, Section 10 of the Uniform Bylaws, available online here, and by your local unit’s standing rules, so start there.  Some local units adopt a meeting schedule in the spring for the following year, whereas others don’t do so until the fall, but whenever the regular meeting schedule is established, notice should be sent to all members.  Even if the meeting schedule is already set, however, a special meeting of the general membership can be called by the President, a majority of the Board or by 5% of the membership.  Of course you’ll also want to take into account factors such as availability of a meeting location, a time that is convenient to members (including the teacher-members), and the nature of the business to be transacted at the meeting.  

Question: 
Our local unit adopted the 2011-12 budget last spring, but over the summer some things have changed that weren’t anticipated when the budget adopted.  Are we stuck with the budget or can we ask our membership to approve some amendments?  
 

Answer: 

Yes.  The budget is developed as a projection based on the best available information at the time.  However since the members adopted the budget they can also amend it, and when I say “members” I mean the membership as a whole, not necessarily those individual members who were present when the budget was adopted.  One further note, you may want to consider also amending the local unit’s standing rules to allow the Board some flexibility to reallocate funds during the year, just in case some need arises when it’s not possible to call a meeting of the entire membership.