Schools Buying Exempt

Purchases must be billed to and paid directly by the school for them to be exempt.

A purchase is billed directly to a school if any of the following applies:

  • The school has a contract with the seller for the item.
  • The seller bills the school for the purchase.
  • A school employee pays with a credit card issued to the school.

A school is paying directly for a purchase if it gives the seller a payment such as:

  • A check from the school
  • Electronic payment from the school
  • Payment of charges on a qualifying credit card held by a school employee that’s in the school’s name

Note: The school isn’t paying for the sale directly if it reimburses the employee. An employee’s personal check, credit card or cash is not direct payment from the school.

As the school, you must give the seller a completed pdf Form ST-101 – Sales Tax Resale or Exemption Certificate, on exempt purchases. The seller must keep the certificate and any other documentation. The seller shouldn’t charge tax on future qualifying sales to you.

Purchases by student activity groups

Purchases that student activity groups make are exempt only if all the following apply:

Purchases by school-affiliated organizations

There’s a difference between a school and an organization affiliated with the school. Affiliates such as a PTA or an alumni association aren’t exempt from paying sales tax.

Affiliates must pay tax on all purchases, even if the purchase is on behalf of the school. This includes supplies and equipment.

Exception: They can buy products for resale (such as for fundraisers) tax exempt, The organization is then operating as a retailer and must have a valid seller’s permit, collect sales tax, file a sales tax return, and forward the tax to the state. They can’t use the school’s sellers permit.