Booster Clubs
PTA
Class of 2009
You are an officer –
NOW WHAT ??
Three Primary Responsibilities
1.
Pay close attention to what’s
going on and make decisions
based on good information.
Three Primary Responsibilities
2.
Put the welfare of the
organization above other
interests when making
decisions.
Three Primary Responsibilities
3.
Act in accordance with the
mission and goals of the
nonprofit organization.
Steps to secure nonprofit status
A purpose
 A name
 Officers
 Form of organization
 Governing documents

Form of organization
Nonprofit association
 Nonprofit corporation

Seek competent legal advice to
make this decision.
Governing Documents
Nonprofit association
 Nonprofit corporation

Articles of incorporation
 Bylaws

Seek competent legal advice.
Steps to secure nonprofit status
Federal Tax Identification
Number
 IRS Application for exemption
 State Application for exemption
 Sales tax permit

Federal Tax Id Number

Form SS – 4
www.IRS.gov
 Can be filed

 Online
 Telephone
 Fax
 Mail
IRS Application for exemption
 Form 1023
within 27 months
 Filing fee

 $300
if <$10,000
 $750 if >$10,000
Publication 557
 Seek competent tax advice

IRS Application for exemption

Public disclosure requirements
Form 1023, and
 All supporting documents
 Any letter or document issued by
the IRS with regard to the
application

IRS Application for exemption

Already exempt and need a
verification letter?

(877) 829-5500 or write to
Internal Revenue Service
EO Customer Account Services
P.O. Box 2508
Cincinnati, OH 45201
Texas Application for exemption

PTA

No application form
Texas Application for exemption

PTA
Affiliated with state association?
 Yes – Send

 Letter
from state association
acknowledging affiliation
 Cover letter requesting exemption
Texas Application for exemption

PTA
Affiliated with state association?
 NO – Send

 Cover
letter requesting exemption
 Statement of operation as NPO
 Schedule of activities
Texas Application for exemption

Other PTOs
No application form
 Send

 Cover
letter requesting exemption
 Statement of operation as NPO
 Schedule of activities
Texas Application for exemption

Booster Clubs
First - MUST have federal tax
exemption
 Then - submit AP-204 with copy of
federal determination letter
 Additional documentation listed on
AP-204

Sales Tax Rules





Texas Administrative Code
Title 34: PUBLIC FINANCE
Part 1: COMPTROLLER OF
PUBLIC ACCOUNTS
Chapter 3: TAX ADMINISTRATION
Subchapter O: STATE SALES AND
USE TAX
Sales Tax Rules

Rule § 3.322

Exempt from sales and use tax on
purchases for the organization’s own
use
Sales Tax Rules

Rule § 3.316

NOT exempt from collection and
remittance of sales tax on items sold
Exceptions: Rule §3.316
Meals and food products
 Annual banquets or suppers
NOT professionally catered
 Amusement services
 Membership dues
 Publications

Exceptions: Rule §3.316

Auctions, Rummage Sales and
Other Fund Raisers:

Exempts occasional sales by persons
not in the business of selling,
leasing or renting
Exceptions: Rule §3.316

Auctions, Rummage Sales and
Other Fund Raisers:
Allows for two (2) ONE DAY sales
during any 12 month period
 One day sale is literally 24 hours.
 A two day sale uses both of the
allowed annual one day sales.

Exceptions: Rule §3.316

Fund raiser in which items are
sold over a period of several days
or weeks
Exempt if there is ONE collection
date for turning money in.
 Qualifies as one of the two allowed
annual one day sales.

Exceptions: Rule §3.316

VERY IMPORTANT that there
only be one collection date for
turning the money in or the
entire fund raiser becomes
subject to sales tax!
Sales Tax Rules

Already exempt and need a
verification letter?
Exempt Organization Search:
http://window.state.tx.us/taxinfo/exe
mpt/xmptsearch.html
 Request for Verification online:
http://www.window.state.tx.us/taxinfo
/exempt/xmpt_ltr_req.html

Sales Tax Rules

Application for Resale
Certificate
AP-201
 http://window.state.tx.us/taxinfo/ta
xforms/ap-201.pdf

Annual Federal Reporting
Form 990-EZ or Form 990
 Not required if annual
GROSS RECIEPTS < $25,000
 If filed, must be available for
public inspection

Form 990-EZ
Annual Gross receipts
<$100,000 AND
 Total assets <$250,000
 Seek competent tax advice

Form 990
Annual Gross receipts
>$100,000 OR
 Total assets >$250,000
 Seek competent tax advice

Form 990-T
Annual Gross income from
unrelated trade or business
>$1,000
 Seek competent tax advice

Loss of Exemption

Public disclosure requirements
Form 1023
 Form 990-EZ, 990, 990-T
 Can charge for copies

for 1st page
.15 for each additional page
 $1

Loss of Exemption
Political activity
 Excess benefit
 Private inurement
 Intermediate sanctions

Loss of Exemption

Prevention:
Adequate books and records
 Policies and procedures
 Continuing accountant or lawyer

Accounting

Adequate books and records
Board meeting minutes
 Check register
 Reconciled bank statements
 Income records

Chart of Accounts
1
2
3
4
5
Assets – what you own
Liabilities – what you owe
Fund Balance – what’s left
Income
Expenses
Policies and Procedures

Internal controls
Board meetings & minutes
 Reporting requirements
 Separation of duties
 Training of new officers
 Continuing accountant or lawyer

Software

When do I need it?
Reporting
 990


Recommendations

QuickBooks