Did specialized booster groups or student-only fundraisers qualify as PTA-equivalent organizations under section 6370?

Plain-English summary

The Compliance Planning and Evaluation Unit asked how section 6370's phrase equivalent organizations performing the same type of service applied to three situations: specialized groups raising funds for the entire school, those groups funding special projects such as instruments or uniforms, and fundraising events conducted by students themselves. Legal answered no to all three.

The memorandum compared prospective groups with objectives and methods quoted from the California PTA By-Laws. Those provisions addressed child and youth welfare, home life, protective laws, cooperation between home and school, educational advantages, public educational programs, noncommercial and nonpartisan operation, school work, and education-policy participation.

An equivalent organization did not need identical objectives or every PTA service. At minimum, however, it should be a nonprofit including parents, promote the welfare of all students, improve communication between parents and school authorities, have school authorization, and use tangible-property sales profits exclusively to further its purposes.

Specialized groups such as athletic booster clubs, band mothers, and drama societies most likely focused on the limited students connected with their interests, not all students. The memorandum therefore rejected equivalence regardless of whether they used raised funds for the entire school or only special projects. Student fundraising also failed because an organization without parents was not PTA-equivalent under the stated test.

Source and live-annotation limits

The PDF does not include the June 12 request memorandum or a separate copy of the California PTA By-Laws. It identifies no actual booster club, band group, drama society, student organization, parent, student, school, governing authority, event, project, instrument, uniform, property, sale, profit, expenditure, return, tax calculation or payment, audit, assessment, claim, appeal, implementation, or later outcome. The opinions concern described categories, and the memorandum says specialized groups would most probably lack an all-students focus; it does not report findings from organizational records.

The extracted official text contains apparent published errors including tangible personal proeprty, most probably no be concerned, and would not quality them; those words remain verbatim below.

The live annotation preserves athletic booster clubs, band mothers, drama societies and similar specialized groups, their limited-student focus, student fundraising, missing parent participation, PTA-equivalence result, and August 10, 1978 date. It omits the formal August 1 date, requester and author, June 12 memorandum, exact three questions and separate whole-school and special-project scenarios, quoted section 6370 subdivisions, PTA By-Laws and detailed minimum criteria, school authorization and exclusive-profit-use conditions, absent authorities and records, source errors, qualified most probably language, and absent implementation and outcome.

What this means for you

Booster clubs, student groups, schools, and tax professionals

Using proceeds for the entire school did not cure an organization's narrow purpose under this opinion. Preserve formation and governing documents, nonprofit status, parent and teacher participation, purposes, all-student programs, parent-school communication, school authorization, event and project materials, property sold, proceeds, profit calculations, use-of-funds records, returns, tax calculations, and payments. Distinguish an all-school expenditure from objectives and services actually directed to all students.

Common questions

Did using funds for the entire school make a booster group PTA-equivalent?

No, not when the group's objectives remained directed toward a limited activity or group of students.

Did student-only fundraising qualify?

No, because the organization did not include parents.

Was school authorization alone enough?

No. It was one of several section 6370 requirements.

Did giving all proceeds to the entire school change the specialized-group result?

No. The memorandum focused on the group's objectives and the limited students connected with its activity.

Did the opinion decide facts for a named booster club or student organization?

No. It answered three general questions from an absent internal memorandum.

Does the official record state one consistent date?

No. The formal field says August 1, 1978; the continuation pages and live annotation say August 10.

Citations and references

• California Revenue and Taxation Code § 6370
• California PTA By-Laws, Article II, §§ 1–2, and Article III(a) and (d) — quoted in part; a separate bylaws copy is not included
• June 12, 1978 Compliance Planning and Evaluation Unit memorandum — not included
• Organization, membership, school, authorization, fundraising, property, sale, profit, expenditure, reporting, tax, and later-proceeding records — implicated but not documented

Verbatim support

From the official Legal memorandum:

In our view, while it may not be necessary that a particular organization have identical objectives and provide all of the services outlined above in order to be “equivalent” to the PTA, at the very least it should be a nonprofit organization which includes parents and whose objectives include enhancing the welfare of all students in the school and developing better communication between parents and school authorities.

It would appear that the answer to each of these questions would be “no.”

Hence, as discussed above, these organizations would not be “equivalent organizations” regardless of how the funds they raise are used.

Source

• Annotated Legal Opinions collection: https://cdtfa.ca.gov/taxes-and-fees/annotations-menu.htm
• Annotation page: https://cdtfa.ca.gov/lawguides/vol2/suta/390-0000-all.html
• Original supporting opinion: https://cdtfa.ca.gov/lawguides/annotations/390-0940.pdf

Original ruling text

State of California

Board of Equalization

Memorandum

To:

Compliance Planning and
Evaluation Unit (DAS)

From:

Les Sorensen

Subject:

Interpretation of Revenue and Taxation Code Section 6370

390.0940

Date:

August 1, 1978

This is written in response to your June 12, 1978 memorandum concerning the above entitled subject matter. You were particularly interested in our opinion as to how the phrase in Section 6370, “equivalent organizations performing the same type of service,” should be construed. You also requested our opinion with respect to the following three questions: 1.

Are specialized groups, such as athletic booster clubs, band mothers, drama societies included if the funds are used for the entire school?

2.

Would such groups still be included if they only gave funds for special projects, i.e., band mothers for purchase of instruments or uniforms?

3.

Would fund raising events by students themselves be included?

Revenue and Taxation Code Section 6370 provides in pertinent part: (a)

This section applies to nonprofit parent-teacher associations chartered by the California Congress of P.T.A., Incorporated, and equivalent organizations performing the same type of service for public or private schools and authorized to operate within the school by the governing authority of the school.

(b)

An organization described in subdivision (a) is a consumer of, and shall not be considered a retailer within the provisions of this part with respect to, tangible personal property which it sells; provided, the profits are used exclusively in furtherance of the purposes of the organization.

(c)

This section shall not be applicable to the state or any of its political subdivisions.

Compliance Planning &
Evaluation Unit (DAS)

-2-

August 10, 1978
390.0940

In order to determine whether a particular organization is equivalent to the PTA and provides the same type of service for the school it is helpful to compare the objectives and services offered by that organization to the objectives and services offered by the PTA. In this regard, I have included pertinent excerpts from the California PTA’s By-Laws. Article II Section 1 lists the objects of the PTA as follows: a.

To promote the welfare of children and youth in home, school, community, and place of worship.

b.

To raise the standards of home life.

c.

To secure adequate laws for the care and protection of children and youth.

d.

To bring into closer relation the home and the school, that parents and teachers may cooperate intelligently in the education of children and youth.

e.

To develop between educators and the general public such united efforts as will secure for all children and youth the highest advantages in physical, mental, social, and spiritual education.

Article II Section 2 indicates how the objects will be promoted as follows: The objects of the National PTA and the California State PTA are promoted through an educational program directed towards parents, teachers, and the general public; are developed through conferences, committees, projects and programs; and are governed and qualified by the basic policies set forth in Article III. Insofar as is pertinent here, Article III provides: a.

The organization shall be noncommercial, nonsectarian, and nonpartisan.

d.
The organization shall work with the schools to provide quality education for all children and youth and shall seek to participate in the decision-making process establishing school policy, recognizing that legal responsibility to make decisions has been delegated by the people to boards of education. In our view, while it may not be necessary that a particular organization have identical objectives and provide all of the services outlined above in order to be “equivalent” to the PTA, at the very least it should be a nonprofit organization which includes parents and whose objectives include enhancing the welfare of all students in the school and developing better

Compliance Planning &
Evaluation Unit (DAS)

-3-

August 10, 1978
390.0940

communication between parents and school authorities. Of course, the other requirements of Section 6370 would also have to be met in order to qualify an organization as a consumer, i.e., it would have to be authorized to operate in the school by the school’s governing authority and the profits of its sales of tangible personal proeprty would have to be used exclusively to further the organization’s purposes. Turning now to the three specific questions posed in your memorandum. It would appear that the answer to each of these questions would be “no.” As to the first and second questions, specialized groups such as athletic booster clubs, band mothers, and drama societies would most probably no be concerned with the welfare of all the students but rather with a limited few. Hence, as discussed above, these organizations would not be “equivalent organizations” regardless of how the funds they raise are used. With respect to question number three, funds raised by the students through the sale of tangible personal property would not quality them for treatment as consumers under Section 6370 since an organization not including parents would not, as discussed above, be “equivalent” to a PTA.

LS:po

cc:

T. P. Putnam.