Texas Sales and Use Tax Exemption Certificate
The Texas Sales and Use Tax Exemption Certificate should be presented each time a purchase is made. It must state that the merchandise being purchased is for the organization’s own use in providing education is being made in the name of the organization, and that payment will be made from the organization’s own funds.
Provisions under Article 21.023 of the Federal Statues provide tax exemption to the school district. Exempt organizations are entitled to an exemption only on items purchased and used directly and exclusively in pursuit of the exempt purpose. For school districts, items purchased must relate to the educational process.
There are a few exceptions that should be noted:
- The district must still pay the city, county or athletics venue taxes on hotels.
- The district will likely be held liable to pay sales taxes on lodging for out of state.
- Airline tickets are still subject to Texas state sales tax that the district must pay.
- Taxes on gasoline for miscellaneous travel expenses will be reimbursed, as the district is not exempt from paying for these.
- State sales tax is paid for leasing, rental or purchasing of vehicles.
- District employees will be reimbursed for appropriate tax paid, but not reimbursed if taxes were paid that we were not required to pay.
- Purchase of personal items for staff or students are not eligible for the sales tax exemption.
- Purchases by individual members, teachers or coaches of classes or teams do not have exemption from sales tax even though they are connected with the school or a school organization. An example of these types of purchases is cheerleaders purchasing their own uniforms.
NOTE: Booster clubs, PTA’s and other associated groups may not use the District’s tax exemption certificate or employer identification number. By law, these groups must obtain their own tax exemption status and employer identification number.