SALES TAX
PTAs must continue to continue filing zero on your scheduled sales and use tax reports.

And finally, the latest on the sales tax law ….
HB0232: “This bill exempts from the State sales and use tax sales made by a parent-teacher organization or other organization within an elementary or secondary school in the State or within a local school system in the State.”
First Option: For now, in lieu of paying sales tax to the vendor, issue them a Blanket Certificate of Resale (located in Cash Encounters and the Sample Reports booklet). The use of the Certificate is limited to a $200 minimum purchase from the vendor. It is required that you have a Sales and Use Tax License. You will need to continue filing zero on your scheduled sales and use tax reports.

Second option: Pay the vendor the sales tax and then request a refund of that sales tax from the State on Maryland. This option would only be used for purchases under $200 or for businesses that will not accept the Blanket Certificate of Resale and only for items that the PTA is going to re-sell. You will need to continue filing zero on your scheduled sales and use tax reports.

The State Comptroller’s Office has posted some Frequently Asked Questions about Sales by Parent-Teacher Organizations and Other Organizations. Questions regarding these FAQs, or questions in general should be directed to the Comptroller’s Office Taxpayer Center by calling 410-260-7980. See link below….
http://taxes.marylandtaxes.com/Business_Taxes/Taxpayer_Assistance/Business_Tax_FAQs/Sales_and_Use_Tax/Parent_Teacher_Organizations_FAQs/

To clarify the Third Party section of the FAQ, the State Comptroller’s office states if the PTA is the point of sale, they are selling the items and the money is going into the PTA account, no sales tax would need to be collected. If the company is the point of sale and is collecting the money directly from the consumer, sales tax should be collected….The company, in this case, would be making a “donation” to the PTA with the % of sales agreed upon. The PTA should continue to use the Blanket Certificate of Resale until the State Comptroller has something more tangible to offer
Third Option: Apply for your own Sales and Use Tax Exemption Certificate. You are not permitted to use the School’s Sales and Use Tax Exemption Certificate. This exemption will eliminate any necessity to pay sales tax in the state of Maryland.

To obtain the Sales and Use Tax exemption, PTAs have to complete the current year Combined Registration Application (CRA), which you may find here: http://forms.marylandtaxes.com/13_forms/CRA.pdf. After January 1, 2014, the 2014 CRA will be required and will be available atwww.marylandtaxes.com. PTAs should complete all required sections and follow the Sales and Use Tax Exemption Certificate (SUTEC) checklist on page 4 for additional information required.
The checklist will help guide you in completing the application. Subordinate organizations, such as PTAs covered by Maryland PTA’s group determination letter must also provide a copy of the group determination letter and a letter from the parent organization on letterhead specifying that the particular organization is covered by your group determination. These letters can be obtained by contacting Maryland PTA. In addition to the 501(c)(3) letter and letter from holder of IRS group determination (mentioned above), the following information is also required:
-The completed CRA
-Articles of Incorporation
-Bylaws
The exemption will take approximately 6- 8 weeks to review and will be valid until 2017 when it will be up for renewal. Also, please note that two individual officers will be required to provide their social security number for the application and will have to remember to have that number removed from the application when their term expires. This can be accomplished with a letter to the department.
*******************************
This does not infer that PTAs are exempt from paying sales tax on items they purchase. Therefore, you must provide any vendor, with which you do business, with the Blanket Certificate of Resale to avoid paying the sales tax on taxable items. These certificates have a purchase threshold of $200. If you do not meet this threshold or the vendor does not accept the certificate –although they are supposed to, you must pay the sales tax and then request a refund from the Office of the Maryland Comptroller.
******************
ACTION ITEM: Please provide Maryland PTA with your sales and use tax license number if you have not already done so. Email the number and your entire PTA name to: office@mdpta.org
*******************
PTAs must pay sales tax when they buy items for their own use such as in a cultural arts program or for their own office supplies.
*******************
(PTAs are independent organizations and are not authorized to use the school tax number)