Sales Made by Colorado Schools Are Exempt
- Sep 26, 2014 | Gail Cole
In certain situations, public and private K-12 schools and their related booster organizations may sell taxable goods exempt from Colorado state sales tax. The exemption also applies to RTD/CD special district sales tax and Regional Transportation Authority (RTA) sales tax; however, other local taxes may still apply.
As explained in Colorado Department of Revenue FYI Sales 86, Sales Tax Exemption on School-Related Items:
“Beginning September 1, 2008, sales made by schools, school activity booster organizations, and student classes or organizations are exempt from state sales tax if all proceeds of the sales are for the benefit of a school or school-approved student organization.”
Examples of items eligible for the exemption include but are not limited to:
- Bake sale goods
- Booster club concession stand food items
- Gift wrap
- Silent auction donation items
In order for the exemption to be valid, all proceeds of the sale must benefit the school or school-approved student organization. However, there is an exception: “proceeds can be used to pay the actual cost of the commodity sold.”
Proceeds may not be used to pay for the following:
- Facility charges
- Other costs
Schools should obtain a standard sales tax license at no cost from the Colorado Department of Revenue.
Normally taxable sales made by a parent/teacher association (PTA) may also be exempt, when made “for the benefit of a public school, or organized public school activities, or to pay the reasonable expenses of the association.” For the exemption to be valid, the association must be a charitable organization and the school that it supports must be a public school. Parent/teacher organizations (PTO) supporting private schools may not claim this exemption.
PTA and PTA groups interested in claiming the exemption must obtain a sales tax license, which costs $8.00 and must be renewed every odd-numbered year.
Additional information, including how school-related organizations should file when required to do so, is available in FYI 86.
Every state handles sales tax differently. In Kansas, for example, sales made by schools and school groups are not exempt.
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