State Sales Tax Requirements

According to House Bill 596, from the 74th Regular Session, recognized student organizations of state Universities are exempt from paying sales tax on items purchased for resale. For additional information regarding sales tax issues, contact Brandt Glover, Bryan Field Enforcement Office, 776-5200. If the organization qualifies, only resale items are tax-exempt.

Student Organizations must pay sales tax on items purchased that are not intended for resale unless application has been made and approved by the Internal Revenue Service deeming the organization a “Not for Profit Organization.” This status is allowable under code 501 [C] 3. For additional information, call the Internal Revenue Service at 800/829-3676 or 800/829-1040.

Student Organizations are exempt from collecting, or paying to the State Comptroller, sales tax on items sold if:

• Gross Sales are less than $5000 in a calendar year; or

• The Organization sells only 1 day per month.

A sales tax permit is required when gross sales exceed $5000 in a calendar year.

A Texas Sales and Use Tax Return for the calendar year is due and payable to the Comptroller by January 20 if:

• Gross Sales exceed $5,000 and the Organization sells more than 1 day per month or the organization submitted a Texas Sales and use Tax Return in the previous year.

This form is available at the following web site: http://www.window.state.tx.us/taxinfo/taxforms/01-114.pdf. Compute sales tax due using the following formulas:

For additional information call: State Comptroller’s Office, Bryan Field Enforcement Office, Brandt Glover, 776-5200.