Sales Tax 2013 Presented by: Denise Benbrook

WHAT WILL BE COVERED  Fundraisers and Fees  Sale/ Not a Sale  Taxable Sales/Non-Taxable Sales  Tax Fee Days  Proper Reporting of Sales Tax  Fundraiser Application/Recap  Questions

Change in Procedures  Why – State requires us to report quarterly January – March: Filed in April April – June: Filed in July July – September: Filed in October October – December: Filed in January  Need to report all Sales, not just sales we owe tax on.

Fundraiser or Fees  Fees: Example: Funds collected for class projects… Art Class, Shop, Band, Dues for Student Clubs.. Most often fees are placed in 461 accounts.  Fundraisers: Fundraiser App. is completed and approved by the Deputy Superintendent. $10, or more in gross sales require Board approval A fund-raising activity may be defined as any activity involving participation of a student body, a school recognized student group undertaken for the purchase of deriving funds for a school or a school faculty sponsored group.

Decision Tree Sale Not a Sale Not Taxable Taxable Tax-Free Day Pay Tax

Sale/Not a Sale Sale Admissions- athletic, dances, drama performances Donated items that are sold Fundraisers where we are the seller, not just the middle person Sales of Food Sales of merchandise (to include items made by students) School publication sales Rental of Instruments Permits Banquet Fees Uniforms- Cheer, PE, Dance, Club Shirts Not a Sale Funds collected to pay admissions: PSAT Test, Sea World Commissions received Donations to a school or school group Dues received for clubs Fees-lab, uniform cleaning Fieldtrip collections Fines received- textbooks, library books, PE uniforms, parking tickets Summer School

Taxable Sales vs. Non-Taxable Sales  Taxable Sales Schools must collect & remit taxes for all taxable items that do not have a specific exemptions Examples: supplies, publications, school store, rentals, Fees for materials when the end product becomes a possession of the student. (Example: Reeds, Sewing Kits)  Non-Taxable Sales Report as sales on Tax Return but pay no tax Examples: Admissions, food items, parking permits, Ad Sales, etc. Both Sales are reported to the Comptroller’s Office. See Page 12 and 13 of the Activity Manual for a more detailed listing.

Taxable Sales /Non-Taxable Sales Taxable Sales Vending- Non edible items when we service the machine. (Example: pencils) School Store- all items except food Transcripts Copies Santa Pictures-we are the seller Catering Spirit items Non-Taxable Sales Ad Sales-Yearbook Admissions Food items sold during fundraising Car Washes Parking Permits All sales, both taxable and non-taxable must be reported to the Comptroller’s Office.

Tax Free Days  Who qualifies? Each school district, each school, and each bona fide student club of each school. Clubs should be organized. Have By-Laws, monthly meetings, elected officers. Must be organized for some business or activity other than instruction. For Example: The school-wide fundraiser qualifies for a tax-free day. The Basketball Club qualifies, but the basketball team does not. The Senior Club qualifies, but not one particular senior class that has seniors in it. Groups meeting for classroom instruction or team sports are not categorized as a Bona Fide club and do not qualify for the tax-free day sales.

Tax Free Days  How often? Two, one-day tax free sales each calendar year. (January 1 – December 31)  One-Day defined 24 consecutive hours- delivery should be made on the same day Pre-Paid sales count as 1 day on day of delivery (example: Yearbooks, T-shirts) All items sold after 24 hr. period would be taxable. Both Sales are reported to Comptroller’s Office. When the school or club receives a commission, the tax-free day does not apply because the sale is the vendor’s sale, not the school’s sale. Sales tax would be collected and remitted to the vendor, and the vendor would report and remit the sales and sales tax to the Comptroller’s Office.

Calculating Sales Tax  Add tax to selling price Example- Selling price is $1.00 and the tax rate is 8.25%, the school would collect $1.08 from the buyer for each item sold.  Including tax in the price of the item being sold Example- An item is sold for $1.00, including tax. Tax will be subtracted for the amount collected on the sale. If this method is used, and the tax rate is 8.25%, divide the sale price or total collections by ($1.00/1.0825= $.92) $1.00 -$.92=$.08 is the amount owed for state and local tax.

Calculating Sales Tax  Taxes Paid to Vendor Item is purchased for $1.00 plus tax of $.08, total $1.08 from a vendor. The item is sold by the school for $2.00. Tax is owed on the difference between purchase price of $1.00 and $2.00. In this example, we would report the $2.00 as a Sale, with $.07 being owed for taxes. $2.00 sale with taxes included. $2.00/ = $1.85, this would be the sale amount. The $.15 remaining would be the taxes owed. $.08 was paid to the vendor, so $.07 is still owed to the Comptroller’s Office.

Tax Rate by Campus 8.25% ADAPT Alvin Elementary Alvin High School Alvin Jr High Alvin Primary ASSETS EC Mason Glenn York Longfellow Manvel High School Mark Twain Mary Marek Nolan Ryan Passmore Stevenson Walt Disney Wilder 6.75% These campuses do not pay City Taxes of 1.5%. Don Jeter Fairview Jr High Harby Jr High Hood Case Manvel Jr High Savannah Lakes City Tax Rate= 1.5% County Tax Rate=.50% State Tax Rate=6.25%

Sales Tax Form Alvin ISD Report of Sales and Sales Tax January 1 - March 31,2013 Tax Rate Instructions: For each deposit from a Sale, record it on a line. Include that amount in one of the next three columns: Non-Taxable, One Day Tax Free, Taxable Sale Including Tax Deposit Date Club/Organization Name Acct. NumberDescription Total Deposit Non-Taxable Sale/Tax Paid on PO One Day Tax Free Taxable Sales Including Tax Taxable Sales Excluding Tax Total Tax Due 1/8/13 Library Pencils /16/13 Library Copies /23/13 Campus T-shirts /29/13 Campus Permits /6/13 Campus Soccer Uniforms Taxes paid on PO 2/8/13 Campus Transcripts /11/13 Choir Carnations /19/13 Campus Yearbooks /20/13 Cheer Concessions /22/13 Band Instrument Rental /16/13 Lego Team T-shirts Subtotals2, , Taxes Paid on PO Tax Paid on POTotal Sales$2, Total Sales Amnt. Reported as SalesTaxable Sales$623.56$51.44Taxes Owed $51.44$32.39Taxes Paid on PO $2, Equals Total Deposits

Reporting of Sales/Taxable Sales Total Sales = All Sales, Taxable and Non- Taxable. Taxable Sales = Only those sales you owe taxes on. Taxable Purchases = Items purchased and sales tax was not paid at time of purchase. Amount Subject to Tax= Taxable Sales & Taxable Purchases Report in Whole Dollars= $2.00 not $1.98 Round to the nearest $$

Reporting Sales Tax to Business Office Sales Tax Hood Case January - March 2013 Total SalesTaxable SalesTaxable PurchasesTaxable Amount 2, Account Number $ $ $ $ $ $24.77 $51.45

Fundraiser Apps./Recap Fundraiser Apps. Exempt? Fundraisers you receive Commissions on are not Tax Exempt. Recap Completed within 30 days of the completion of the fundraiser.

Texas Resale Certificate Schools may issue a Resale Certificate in lieu of paying tax to suppliers when purchasing taxable items to resale during its designated tax free sale days.

Questions? Survey