Sales Tax FAQs
Does Carroll ISD pay state sales tax on purchases?
- We are considered a governmental entity and therefore are not subject to Texas state sales tax for items purchased by the district to be retained and used within the
- If however, we purchase items (tax free) with the intention to sell the items to the students, staff, or the general population; the sales transaction may be subject to state sales tax. The key elements are:
- was it purchased tax free,
- was it “sold” to an individual or outside group, and
- does the sale fall under a taxable event category? More information on this information
Does Carroll ISD pay other types of taxes (city, county, other states, federal)?
- There are situations where CISD may be required to pay a type of sales tax. These include:
- City taxes (i.e. hotel city tax or parking tax in Austin)
- State taxes for states other than Texas
- Federal tax (i.e. flight taxes, )
What is a sale?
- When the district purchases items (tax free) and then sells these items to staff, students, or the general public; a change in ownership has occurred. (From CISD to the individual). Once this has happened the first part of the equation that could trigger a taxable event has
- Examples of sales include:
- Admission to athletic events, dances
- Parking permits / Bus passes
- Sales of food
- Sales of services
- Sales of school publications
- Sales of t-shirts or other school related clothing
- Examples of non-sales include:
- Field trip collections
- Fees for musical instruments, transcripts, uniform cleaning,
- Lost payments for books, handbooks, calculators,
- NSF check charges
- Summer School tuition fees
These are not an all-inclusive list, but is used simply for illustration.
What is a taxable event?
- When tangible property or services are sold a taxable event may be triggered.
- Examples of taxable events are sales of:
- Planners sold to students at the beginning of the year
- Art supplies
- Athletic equipment to be kept by the student
- Auction items
- Band equipment to be kept by the student
- Library book sales
- Clothing (t-shirts, spirit wear, caps, )
- Flower arrangements
- Merchandise, tangible personal property
- Anytime this type of property is exchanged from the district to an individual
- Examples of non-taxable events are sales of:
- Ad sales in yearbooks, athletic programs,
- Admission to athletic, dances, drama, musical or other events
- Banquet fees
- Discount/Entertainment cards and books
- Facility rentals (if no food is sold or if rented to another exempt organization)
- Parking permits / Bus passes
- Car washes
Again, this is not an all-inclusive list, simply for illustration
Are instructional supplies and materials taxable?
- Instructional supplies or materials kept in the ownership of the district and used in the day to day operation of instructing students, are not
What are tax-freedays?
- According to the Texas State Comptroller of Public Accounts, schools are allowed two one-day tax-free sales per calendar year, based on particular requirements.
- “School districts, public schools, qualified exempt private schools and bona fide chapters within a qualifying school may conduct two- one day tax-free sales or auctions per each calendar year. For purposes of this exemption, one day is counted as 24 consecutive hours and a calendar year is the 12-month period from Januarythrough December.”
- CISD as an entire district is allowed 2 tax free days per calendar year
- Each campus is allowed 2 tax free days per calendar year
- Each bona-fide chapter of the campus/district are allowed two-tax free days per calendar
- This option allows a qualified group the ability to purchase items tax free, sell those items to the public and not pay state sales
What is a bona fide chapter of the district?
- A bona fide chapter is a group that is organized for some business or activity other than instruction or a participatory
- Any student group that is recognized by the school and is organized by electing officers (not just participatory captains), holding meetings, and conducting business are bona fide
- Examples of a bona fide group include
- National Honor Society
- Swim Club (not Swim Team)
- Senior Class (not an individual class with seniors in it)
- Debate Club (not Debate Class)
- French Club (not French Class)
Are food sales taxable?
- If food is sold as a fundraiser at any time, it is tax
- Tax exempt food sales by the district (i.e. school nutrition) are limited to the regular school
- Athletic event concession sales are taxable unless they are a part of a fundraiser.
Is Carroll ISD considered a 501(c)(3)organization?
- No, Carroll ISD is considered a different type of tax-exempt organization. Specifically we are a “Political subdivision” of the state of Texas, thereby, making us Texas state sales tax
- A 501(c)(3) is an IRS designated category granted to religious, education, charitable, scientific, literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations. (i.e. Booster Clubs, PTO’s, other school support groups that are not otherwise district related).
Should I share the district’s Tax Identification Number (TIN) with the PTO/Booster Club or others?
- No, the TIN is considered much like your personal social security number and is entity specific. Other groups must apply for their own TIN and use their TIN for business purposes. We cannot share
Can campuses/departments sell school property once it is no longer useful?
- School property may at some time meet the end of a useful life, and need to be disposed of, but at the same time someone in the public may still find value and be willing to purchase the
- There is a very specific process in place to dispose of items. Please refer to School Board Policies CI (Local) & CI (Legal). “The Superintendent or designee is authorized to declare District materials, equipment, and supplies to be unnecessary.”
- Prior to any sale of school owned property, please refer to these policies and contact the Financial Services Department for guidance.