Frequently Asked Questions by PTA Treasurers

  1. When do PTAs need to collect and pay sales tax?

PTA organizations classified as 501(c)(3) or 501(c)4 are exempt from Washington State sales taxes on fundraising activities.  All periodic fund raising activities that are not continuing and are not conducted from the same location are exempt from sales tax.  Activities that are not exempt from sales tax include student stores and book fairs.

What this means is:

·        PTAs do not have to add sales tax to the purchase price of an item; collect the tax; or remit the tax to the Department of Revenue (except student stores or book fairs).

·        PTAs do not have to pay sales tax to suppliers/vendors of products that re being purchased for resale by the PTA if the PTA provides a resale certificate to the supplier/vendor (except student stores and book fairs).

Book Fairs are like consignment sales.  In consignment sales, the items to be sold are given to the seller by the original “owner” with the understanding that once the goods are sold, the income will be remitted to the original “owner.”  Sales tax needs to be collected and remitted to the vendor.  The vendor pays the sales tax to the Department of Revenue.

A copy of the WSPTA Sales Tax Bulletin can be downloaded from the WSPTA website along with a copy of the resale certificate, and is included in the WSPTA Leadership Guide under the Bylaws/Money Matters tab.

  1. How can a PTA handle a member who constantly writes NSF (non-sufficient funds) checks?

Inform the member that the PTA will not longer accept checks from them.  This conversation needs to be handled discreetly.  Businesses have a list of people in the community who habitually write NSF checks.  The PTA can do that also, as long as the list is kept confidential.  It may also be advisable to put an section in your Standing Rules that states that any person writing NSF checks will have to pay all bank charges.

For occasional NSF checks, you can call the bank or credit union and ask if there are sufficient funds to cover the check before depositing it again.

To help keep track of check writers, have parents put the student’s name and teacher’s name/room number on each check.

  1. Do volunteers have to be PTA members to be covered by PTA insurance while working at events?

No, all volunteers, members, and participants at any PTA function are covered under the insurance policy through AIM (in agreement with the Washington State PTA).

  1. When I pay my membership fee to a 501(c)(3) PTA, is the entire amount tax deductible as a charitable contribution?

Yes.  Washington State PTA is now a 501(c) (3) organization so the State PTA portion of the membership fee (currently $4.75) is now tax deductible. This was not the case when Washington State PTA was a 501 (c)(4).

  1. We do not want to accept the report of the previous audit committee because the treasurer was present at the audit.  Can we request another audit with another committee?

You can request another audit with a different audit committee.  The president , according to the Uniform Bylaws of the Washington State PTA, appoints the audit committee.  The treasurer should be available to answer questions but should not sit at the table with the audit committee.

An audit can be requested any time that there is a question about the financial well-being or performance of the PTA.

  1. I think that our president misappropriated PTA money by purchasing flowers for the executive committee when money was not allocated for that expense.  Now she is asking for reimbursement.  Is this considered missing money?  Do I have to pay her?

No, it is not missing money.  This request by the president is an improper one.  As treasurer, you can refuse to reimburse the president unless the board of directors or the membership approved the purchase in advance.

  1. What kind of carnival games are considered games of chance or gambling which require the $5,000.00 measurement?  Surely not all games held at a carnival would be considered gambling – what about cake walks with a cake prize?  Beanbag toss with no prize?

All games of chance or skill are considered part of the gambling event.  Cake walks, dart games, bean bag toss, and fish pond are all games of chance or skill and must be taken into account when calculating the receipt amount.

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