Title: Tax and Business Side of FundRaisers
1Tax and Business Sideof Fund-Raisers
- Carol Oman
- CFISD Internal Auditor
2Agenda
- Fund-Raiser Guidelines
- Fund-Raiser Decisions
- Sales Tax
- Accounting for Fund-Raisers
- Contributions
- Use of Funds Raised
3Fund-Raiser Guidelines
- District
- High Schools - http//www.cfisd.net/campuses/boost
er/booster.htm - Middle Schools intranet
- Elementary Schools intranet
- For a copy of the Guidelines on the intranet,
contact Marty Edwards, Director of General
Administration, at 281-517-6367, or
terry.edwards_at_cfisd.net.
4Fund-Raiser Guidelines
- PTOs PTO President and Principal have
hard-copy. - Booster Clubs - http//www.cfisd.net/campuses/boos
ter/booster.htm
5Fund-Raiser Decisions
- Who is holding the fund-raiser?
- PTO
- Booster Club
- Student Group
- School
6 - PTO / Booster Club Fund-Raisers- These
organizations are responsible for handling the
money. - Student Group / School Fund-Raisers- School is
responsible for handling the money.
7 - What type of fund-raiser is to be held?Consider
profit made from previous fund-raisers as
compared to the work involved.Consider sales
tax implications.
8Examples of Fund-Raisers
- Ads
- Camp / Clinic
- Candles
- Car Wash
- Cookie Dough
- Concessions
- Entertainment Book
- Garage Sale
- Gift Wrap
- Magazines
- Plants
- Silent Auction
- T-Shirts
- Yard Signs
9Raffles
- Raffles can not be held by a student group,
school, or the district. - Raffles may be held by PTOs and Booster Clubs if
certain State criteria are met as discussed at
http//www.oag.state.tx.us/consumer/raffle.shtml. - Raffle tickets can not be sold on district
property.
10Fund-Raiser Vendors
- Is vendor an Approved Fund-Raiser
Vendor?Confirm with the Director of General
Administration, Marty Edwards, at 281-517-6367
or terry.edwards_at_cfisd.net.
11Vendors Fair
- Annually (usually in February) the PTO Presidents
Council holds a Vendors Fair. - The Vendors Fair allows interested parties to
preview fund-raising options and speak to vendor
representatives.
12Sales Tax
- Did you know . . .
- Even though you have a Texas sales tax-exemption
and have an IRS tax-exemption - You may need to collect sales tax and
- You may need to pay sales tax.
13Sales Tax Permit
- Do you have a sales tax permit with the Texas
Comptrollers Office? - The permit allows an organization to sell items
in Texas. - Apply on-line for a sales tax permit at
http//www.cpa.state.tx.us/taxpermit/.
14Sales Tax Exemption
- Do you have a sales tax exemption with the Texas
Comptrollers Office? - Sales tax exemption allows an organization to
purchase and sell some items tax-free.
15Sales Tax Exemption
- Apply for sales tax exemption. Forms are
available on-line at http//www.cpa.state.tx.us/t
axinfo/exempt/index.html - AP-204 Application is for organizations that
have their IRS 501(c)(3) tax-exempt status. - AP-207 Application can be used by a PTO prior
to receiving their IRS 501(c)(3) tax-exempt
status.
16Check Your Status
- You may look up the status of your organization
to determine if you have a sales tax permit or
exemption at http//www.cpa.state.tx.us/taxinfo/sa
les/tp_db_search.html. - Sales Taxpayer Search
- Exempt Organization Search Verification
17District Sales Tax Status
- The district along with the schools and student
groups are tax-exempt entities for sales tax
purposes.
18Tax-Exempt Sales
- By law, these items are tax-exempt.
- Ads Athletic Programs, School Newspapers,
Posters, Yearbooks - Admission Athletic Events, Dances, Dance /
Drama / Musical Performances, Summer Camps /
Clinics, Workshops, Project Graduation - Discount / Entertainment Cards Books
19Tax-Exempt Sales
- Food that is not ready to eat Cookie Dough /
Frozen Pizzas - Magazine Subscriptions for more than 6 Months
- Services Car Wash, Cleaning
- Whole Cakes Pies
20Taxable Sales
- Auctions and Silent Auctions
- Calendars and Day Planners
- Candles
- Clothing including T-Shirts
- Flowers Roses, Carnations, Arrangements
- Gift Wrap, Balloons, etc.
21Taxable Sales
- Magazines When Sold Individually
- Magazine Subscriptions Sold for Less than 6
Months - Plants Holiday Greenery, Poinsettias, Floral
Arrangements - Rummage, Yard Garage Sales
- School Store Spirit Items
- Yard Signs
22One-Day Tax-Free Sales Days
- Exempt organizations are entitled to two (2)
one-day tax-free sales days per calendar year
not school year. Suggest holding one fund-raiser
in the Spring and one in the Fall. - Sales are taxable unless you use a one-day
tax-free sales day. One-day is a 24 hour
period of time.
23One-Day Tax-Free Sales Days
- Select the taxable fund-raiser (exclude catalog
sales and book fairs) that involves the most
money received (highest gross) not the largest
profit. - Document which fund-raisers are your one-day
tax-free sales days.
24Catalog Sales / Book Fairs
- Catalog sales of tax-exempt items are not
taxable. - Example Cookie Dough
- Catalog sales of taxable items and book fairs are
ALWAYS taxable. - Example Gift Wrap
25Taxable Sales
- For catalog sales of taxable items and book
fairs, you are considered an agent of the vendor.
These fund-raisers are ALWAYS taxable. - As an agent of the vendor, you can not use a
one-day tax-free sales day. - Make sure that you and the vendor are in
agreement on the handling of the sales tax.
26 - For catalog sales of taxable items and for book
fairs, - Collect the sales tax and remit it to
the vendor.- The vendor will pay the sales tax
to the Texas Comptrollers Office.
27Fund-Raiser Taxable?
- If you are not sure if your fund-raiser is
taxable, contact the Texas Comptrollers Office
at 1-800-252-5555. - Document the date, time, who you spoke with, your
questions, and the answers received.
28Fund-Raiser Taxable?
- Research the fund-raiser using the Texas
Comptrollers Office State Tax Automated Research
(STAR) system. - The STAR system is found under Resources
athttp//www.cpa.state.tx.us/taxinfo/sales/.
29Sales Tax
- If you have a taxable sale, will sales tax be
included in the sales price or will it be added
to sales price? - For catalog sales and book fairs, easiest to have
sales tax included in the price. - If sales tax is included in the sales price, must
state on brochures or signs.
30Sales Tax Holiday
- Usually in August, the State has a sales tax
holiday. - If you sell items that meet the criteria of the
sales tax holiday and sell them during that
holiday, the items are tax-free. Is not
considered as one of your one-day tax-free
sales days.
31Collection of Money
- For fund-raisers involving orders
- Will money be collected at the time orders are
received or when product is delivered?
32Collection of Money
- If money is collected when orders are received,
you can determine if any checks are returned
prior to delivering products. - If money is collected when products are
delivered, customers may order more since money
is not needed when order is placed.
33Collection of Money
- Have checks made payable to the PTO, the Booster
Club, or the School depending on who is holding
the fund-raiser. Do not have checks made payable
to a school group. - Example Do not make a check payable to the
Student Council, make the check payable to the
School. In the memo section of the check,
indicate that it is for Student Council.
34Collection of Money
- Endorse checks and deposit money as soon as
possible to prevent the loss of funds. - Loss of funds may occur due to embezzlement,
theft, or returned checks.
35District - Prohibitions
- By law, the possession or consumption of
alcoholic beverages on school district property
is prohibited. - If you have an event not on school district
property, alcohol can not be consumed while
students are present. - If alcohol is included in an event, please
consider that some parents could be offended.
36IRS - Prohibitions
- Can not require anyone to participate in a
fund-raiser. - Can not require that a certain amount be sold or
that a certain amount be donated in lieu of
fund-raising. - Can not penalize anyone for not participating in
a fund-raiser.
37Individual Accounts
- PROHIBITED
- Can not credit an individual based on revenues
raised to offset that individuals expenses. - Amount raised must benefit a campus /
organization as a whole.
38Example
- Science Club is having a fund-raiser for a trip.
Cost of trip is 5,000 for 100 students. Cost
per student is 50. - 50 students participate in a fund-raiser and
raise 1,500. - The 1,500 must be split equally among the 100
students. Cost per student is now 35 (5,000 -
1,500 3,500 / 100 students).
39Approvals
- PTO Fund-Raisers - approved by PTO Board and
Principal. - Booster Club Fund-Raisers - approved by Booster
Club Board, Sponsor, and Principal.
40Approvals
- Student Groups / Schools - approved by
pertinent school administrators and
Principal. - Use the Fund-Raising Activity Report to request
Permission (first page).
41Tax Forms
- If you are purchasing items for resale, provide
the vendor with a Texas Sales and Use Resale
Certificate in lieu of paying tax. - If you are purchasing items for resale and the
sale will be exempt from tax due to your one-day
tax-free sales day, provide the vendor with a
Texas Sales and Use Tax Exemption Certification
in lieu of paying tax.
42Fund-Raiser Decisions
- Who is holding the fund-raiser?
- What type of fund-raiser is to be held?
- Is vendor an Approved Fund-Raiser Vendor?
- Do you have a sales tax permit?
- Do you have a sales tax exemption?
43Fund-Raiser Decisions
- Are the items being sold tax-exempt by law?
- If 6 is no, will you use a one-day tax-free
sales day? - If 7 is no, sales tax needs to be collected.
Will the sales price include sales tax or will
sales tax be added to the sales price? - For fund-raisers involving orders, will money be
collected when order is placed or when order is
delivered? - Has appropriate approval been received for the
fund-raiser?
44Accounting for Fund-Raiser
- As money for a fund-raiser is received, have two
people count the money before giving it to the
Treasurer or Financial Secretary for deposit. - Deposit money as soon as possible.
- Do not use cash received to pay expenses.
Deposit money first and then write checks for
expenses incurred.
45Accounting for Fund-Raiser
- Complete the Operating Report (page 2) of the
Fund-Raising Activity Report. - Depending on the type of fund-raiser, account for
products or tickets sold.
46Accounting for Products Sold
- Product Received from Vendor
- Less Product Returned to Vendor
- Less Product Remaining on Hand
- of Products Sold X Sales Price
- Total (Gross) Sales
47Accounting for Products Sold
- Total (Gross) Sales Amount Owed (People
received product but did not pay.Need list of
these people and amount owed.) - Amount Collected / Deposited
48Accounting for Products Sold
- If Total Sales less Amount Owed does not agree to
Amount Collected / Deposited, determine the
difference and why. - Pursue the collection of any money owed.
49Accounting for Tickets Sold
- Based on the beginning and ending ticket numbers,
determine how many tickets at each price level
were sold. - of Tickets Sold x Price Total Sales
- Total Sales Amount Collected / Deposited
- If not, determine the difference and why.
50Sales Tax Return
- Texas Comptrollers Office Requires submission
of a Texas Sales and Use Tax Return - Due either monthly, quarterly, semi-annually, or
annually - Due on the 20th day of the month following the
end of each reporting period.
51Tax Included Calculation
- Example Sales Price included Sales Tax
- Total Sales - 1,000, Tax Rate 7 ¼
- 1,000 / 1.0725 932.40 (taxable sales)
- 932.40 x .0725 67.60 (sales tax)
- 932.40 67.60 1,000
52Contributions
- What is a contribution (donation) (gift)?
- Money
- Equipment or Other Tangible Items
- Funds used to assist a student group or school
even though, funds are not given or paid directly
to a school or the district.
53Contributions
- Example 1 A PTO pays for breakfast for
teachers for morale purposes. The amount paid
for the meal is considered a contribution to the
District.
54Contributions
- Example 2 A PTO receives items from
businesses. The items are used as door prizes at
a staff breakfast. - The businesses made contributions to the PTO.
Then the PTO contributed these items to the
school. These items would be considered a
contribution to the District.
55Contributions
- Example 3 A Booster Club pays for some special
uniforms. Some of the money is from fees paid by
students / parents and some money is from
fund-raisers held. The money from the
fund-raisers is considered contributions to the
District.
56Contributions
- Contributions to a PTO / Booster Club
- Must be a 501(c)(3) entity as approved by the IRS
to receive a charitable contribution. - Provide contributor with your organizations EIN
and, possibly, a copy of your IRS Determination
Letter.
57Contributions
- Contributions to a student group / school /
district - Contribution Acknowledgment Form must be
completed by a district employee.
58Contributions
- PTOs and Booster Clubs should submit to the
school a list of their contributions at least
once every semester. - Then the school should provide you with a
Contribution Acknowledgment Form for these
contributions.
59Use of Funds Raised
- For funds raised, use the money as originally
budgeted or designated. If a change is needed,
inform your membership and request approval as
required by your bylaws. - Use funds raised in the year the fund-raisers are
held so that the parents / students that raised
the funds will see the benefit.
60Use of Funds Raised
- If an organization is working towards a project
that will take several years to fund, inform your
membership. - Do not purchase gifts for principals or sponsors
with PTO or Booster Club funds.
61Contacts
- Fund-Raisers
- Marty Edwards Director of General
Administration - 281-517-6367 terry.edwards_at_cfisd.net
- Contributions
- Pam Scott Partners in Education Director
- 281-894-3950 pamela.scott_at_cfisd.net
62Contacts
- IRS Other Questions
- Carol Oman Internal Auditor 281-897-4111
- carol.oman_at_cfisd.net
- Pat Stefan Internal Auditor II 281-517-6537
- patricia.stefan_at_cfisd.net
63Contacts
- Texas Comptrollers Office Sales TaxGeneral
Information 1-800-252-5555http//www.cpa.state.
tx.us/taxinfo/sales/ - Exempt Organizations Department
- 1-800-531-5441 ext. 34142
- http//www.cpa.state.tx.us/taxinfo/exempt/index.ht
ml
64Contacts
- Internal Revenue Service (IRS)Tax-Exempt
Organizations1-877-829-5500 (toll-free)www.irs.g
ov (Select Charities Non-Profits)
65Questions