A nationwide tax resource for brochure fundraisers
How do you know if you need to collect sales tax on your brochure fundraiser or not? It’s actually not as straight forward as you might think. The most common misunderstanding is, “We’re a nonprofit organization so we don’t need to worry about tax”. On the contrary, every state has tax laws regarding fundraisers; therefore it’s important that you understand what your obligations are, if any, before moving forward with your sale.
When it comes to school brochure fundraising tax laws, no 2 states are alike. Some only charge tax on the wholesale cost while others charge on retail.
Retail (Brochure List Price) = Wholesale (Invoice Amount) + Group Profit
You may be responsible for tax on nonfood only, or both food and nonfood items. Or, you may not be required to pay any tax at all if you have a tax exempt certificate or tax ID number. Finally, your state may not require you to pay any tax regardless. However, make sure you’re not on the hook for any local taxes either.
Assistance from Brochure Fundraiser Companies
Many brochure fundraiser companies offer to collect and remit the sales tax on behalf of the organization. Some even provide brochures that already have the tax included in the price shown for each item. This way, the tax won’t come out of your profit; plus you wouldn’t need to ask your parents to collect it with their orders. Although some companies provide tax charts, this adds another step for your sellers. Regardless, companies should always itemize the tax amount on your invoice so you’ll know how much is owed.
Brochure Fundraising Sales Tax Table
Understanding school brochure fundraising sales tax can be daunting. In order to clear up some of the confusion, we’ve created the following resource table. Keep in mind that tax laws may change so we recommend contacting your state department of revenue (DOR) for the latest and most accurate information. Please note that all sales tax rates shown below are state percentages only. Local cities and counties may impose additional tax. For combined state and local tax rates, see Calculator.net.
|State||Tax on Food||Tax on Nonfood||Tax on Wholesale/ Retail||State Tax||Tax Status||State DOR Website|
|Alaska||No||No||N/A||0%||No State Tax||http://dor.alaska.gov|
|Arizona||Yes||Yes||Wholesale||5.6%||Not Tax Exempt||https://www.azdor.gov|
|Arkansas||Yes||Yes||Retail||6.5%||Not Tax Exempt||http://www.dfa.arkansas.gov|
|California||No||Yes||Retail||7.5%||Not Tax Exempt||http://www.taxes.ca.gov|
|Idaho||Yes||Yes||Retail||6%||Not Tax Exempt||http://tax.idaho.gov|
|Kansas||Yes||Yes||Retail||6.15%||Not Tax Exempt||http://www.ksrevenue.org|
|New Hampshire||No||No||N/A||0%||No Tax||http://revenue.nh.gov|
|New Jersey||No||Yes||Wholesale||7%||Tax Exempt||http://www.state.nj.us/treasury/revenue|
|New Mexico||Yes||Yes||Wholesale||5.125%||Tax Exempt||http://www.tax.newmexico.gov|
|New York||No||Yes||Retail||4%||Certificate Required||https://www.tax.ny.gov|
|North Carolina||Yes||Yes||Wholesale||4.75%||Certificate Required||http://www.dornc.com|
|North Dakota||No||Yes||Retail||5%||Tax Exempt||https://www.nd.gov/tax|
|Rhode Island||No||Yes||Retail||7%||Tax Exempt||http://www.tax.ri.gov|
|South Carolina||Yes||Yes||Retail||6%||Certificate Required||https://dor.sc.gov|
|South Dakota||Yes||Yes||Wholesale||4%||Not Tax Exempt||http://dor.sd.gov|
|Texas||Yes||Yes||Retail||6.25%||Not Tax Exempt||http://comptroller.texas.gov/taxes|
|Vermont||No||Yes||Retail||6%||Not Tax Exempt||http://tax.vermont.gov|
|Virginia||Yes||Yes||Retail||5.3%||Not Tax Exempt||http://www.tax.virginia.gov|
|West Virginia||Yes||Yes||Retail||6%||Tax Exempt||http://www.revenue.wv.gov|
Sales Tax Takeaways
- Every state that charges tax, charges it 100% of the time on nonfood items.
- Only Delaware, Montana, New Hampshire and Oregon do not have a state or local sales tax.
- Alaska is the only state that doesn’t charge state tax, but charges a local tax.
- 9 states are not tax exempt and don’t accept tax exempt certificates. Therefore, you must pay school fundraising sales tax in those states regardless.
- Only 9 states don’t add a local sales tax to the state tax.
In summary, first check with your state DOR to see if your group is tax exempt from paying school brochure fundraising sales tax. If you are tax exempt, then you won’t need to worry about tax. However, if you’re not tax exempt, your state may allow you to submit a valid tax exempt certificate. However, if neither of these options are available, you'll need to collect sales tax for your fundraiser. And if you happen to live in a state that doesn't charge sales tax at all, you're off the hook regardless.
Additional Tax Resources:
- Taxes, PTOs, and the IRS: Questions about tax-exemption? Get the scoop on 501(c)(3), by PTO Today
- IRS FAQs: Frequently Asked Questions About Applying for Tax Exemption
- IRS Forms: Exempt Organizations Forms & Instructions
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