With the passage of House Bill 232, effective July 1, 2013, PTAs will no longer need to charge sales tax when fundraising items are sold or re-sold by PTAs (like gift wrap, pizza kits, or spirit wear), in which funds from sales are deposited into the PTA account and paid out to a vendor (if applicable).
HB0232: “This bill exempts from the State sales and use tax sales made by a parent-teacher organization or other organization within and elementary or secondary school in the State or within a local school system in the State.”
Maryland PTAs must continue to file and report sales and use tax reports indicating $0 in taxable sales as required by the taxing authority. Local PTA units are still required to pay sales tax on items purchased, unless those items will be resold. PTA units with a merchant account and using their own credit card machine must collect, file, and report sales taxes in one of three ways:
1. Issue a Blanket Certificate of Sale (see Cash Encounters) to the vendor in lieu of paying sales tax.
2. Pay the sales tax, then request a refund of that sales tax from the State.
3. Apply for Sales and Use Tax Exemption Certificate. PTA units may not use the school’s exemption certificate. The exemption may be obtained by filing the current year Combined Registration Application.
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.
Every local PT(S)A must file an IRS 990 every year; a copy of that 990 filing also must be sent to Free State PTA (email firstname.lastname@example.org).
If your local unit had gross receipts of less than $50,000, go to the IRS website to locate the form 990-N, a relatively simple form to complete online by November 15. But if you wish to file the 990-EZ instead of the 990-N, you may do so.
If your local unit had gross receipts of $50,000, but less than $200,000 (more than $200,000 requires a 990), you are required to file IRS Form 990-EZ and the accompanying Schedule A (Schedule B and others as necessary).
Please make sure that your 4 digit GEN code, Block F, is listed as 1999. This code identifies you as part of the Free State PTA group.
WHY: On May 28, 1969, the Internal Revenue Service granted a blanket exemption to all Maryland state, county, and local PTA units under Section 501(c)(3) of the Internal Revenue Code. As a result, donations to your PTA are tax-deductible. If you fail to complete the form, you jeopardize your non–profit status, and will be required to pay income tax on all profits.
DEADLINE: The deadline for filing—990-N, 990-EZ, 990, or Extension—is November 15, 4.5 months after the end of the PTA fiscal year (June 30). A copy of your filing must be sent to Free State PTA via email (email@example.com) by December 15.
TIP: Once your fiscal year has ended on June 30, don’t wait until November 15 to file the required paperwork. You can do it anytime after the fiscal year has ended.
- To use this form, your local unit must have earned less than $50,000 in a year (calendar or fiscal as defined in your IRS organizational documents) (if your local unit earned more than $50,000, you must fill out the 990-EZ).
- STEP 1: Register as a New User
- STEP 2: Create your Form 990-N (e-Postcard)
- STEP 3: Submit your Form 990-N (e-Postcard)
- Once you complete your e-Postcard, click the “Submit Filing to IRS” button.
- Several days after completing the 990, you will receive an email from the IRS stating the 990 has been accepted.
- If accepted, forward that accepted email to firstname.lastname@example.org as a confirmation of completion.
- To complete the form you must have the EIN.
- If you need assistance contact the PTA Council treasurer.