State Sales Tax

Collecting Sales Tax on Items Sold

All student organizations are required by law to collect sales tax when selling goods and/or services (this may include tickets to an event). If an organization has a state sales tax exemption, this means that the group is exempt from paying sales tax. The group is still responsible for collecting sales tax when selling goods or services. Remember, student organizations can be audited by the state, so it is very important that sales tax is properly collected and remitted to the State Comptroller's Office. If you have questions on sales tax you can call the State Comptroller at 1-800-252-5555 or you can e-mail tax.help@cpa.state.tx.us.

In order to properly remit sales tax:

• Pick up a Sales Tax Permit Form in SALD, or you can download forms from Texas Comptroller
• Fill out the form and send it in to:
  Texas Comptroller of Public Accounts
  Austin, TX 78774-0100
• It will take 4-6 weeks for your form to be processed. When you receive your permit number, make a copy and keep it in your bank folder at the Student Organization Bank so that it will be readily available for you. This permit number is for you to use when you remit payments to the state. It allows the comptroller's office to readily identify what organization is remitting payment.
• Obtain a "Texas Sales and Use" tax return from the Comptroller's Office. You can do this by calling 463-4600.
• Fill out the tax return and send it to the address above by the 20th day of the next calendar month after the month of your sale.

If your organization owes less than $500 in sales tax for a calendar month or $1,500 for a calendar quarter, taxes may be paid on a quarterly basis. This means payment is due by the 20th day of the month following each calendar quarter.

Exceptions to sales tax law

• If an organization is planning a one-day sale within a calendar month, it does not have to collect sales tax on any goods sold during that one-day period. An organization may only hold one tax free sale per month.
• If an organization is holding an event that is exclusively for members of the UT Austin community and they have not hired any off-campus business to provide services (such as a caterer or DJ), the organization does not have to collect sales tax for tickets to the event. We highly recommend that organizations who are planning events on campus talk to Student Activities and Leadership Development about sales tax.

Paying Sales Tax on Items Purchased

• Student organizations are NOT automatically exempt from paying state sales tax. To find out if your organization may file to become sales tax exempt, refer to Comptroller of Public Accounts, State Sales and Use Tax, Rule 3.322 (Texas Tax Code 151.309, 151.310: Texas Civil Statutes, Article 342-908). If your organization is eligible, you must first obtain 501c status from the Internal Revenue Service. It may take over eight weeks for the forms to be processed by the IRS. If 501c status is granted, the organization may apply to the state by submitting a letter, a copy of your charter/bylaws, and a copy of your 501c letter of determination from the IRS (if applicable) to the following address:
  Tax Policy Division
  Exempt Organizations Section
  Texas Comptroller of Public Accounts
  P.O. Box 13528
  Austin, Texas 78711-3528
• Upon a ruling by the State Comptroller's Office you will receive a letter allowing or denying exempt status. If exempt status is granted, please inform Student Activities and Leadership Development and provide a copy of documentation for your organization's permanent file.
• If an organization is purchasing merchandise for resale, it has two options regarding sales tax.
  1. The organization may obtain a resale certificate from the State Comptroller's Office, which will allow the organization to defer payment of sales tax until time of sale. This does not mean that the organization does not pay sales tax. It means that it will collect sales tax for the item when it is resold and that sales tax will then be remitted to the state.
  2. The organization can pay the vendor sales tax on the items purchased. Please note, however, that if the organization is selling the merchandise at a mark-up, sales tax must be collected and paid on the mark-up.