Does a booster club qualify as a PTA or PTO for the Kansas sales-tax exemption?

Plain-English summary

An organization asked to be recognized as exempt as a parent-teacher association. The Department explained that, effective July 1, 1998, K.S.A. 79-3606(yy) exempts all purchases of tangible personal property and services by a PTA or PTO, and all sales of tangible personal property by or on behalf of such an association or organization.

It then defined the terms. A parent-teacher association is a nonprofit chartered by the National PTA or the Kansas PTA, authorized to operate within the school by the school's administrators, and composed of teachers and parents. A parent-teacher organization is a nonprofit that is the functional equivalent of a PTA. PTAs and PTOs operate for the benefit and support of an individual school, with a defined organizational structure, purpose, and goal — and there is normally only one PTA or PTO per school.

Crucially, the Department stated that booster clubs or other clubs that support sports, bands, or other extracurricular activities do not qualify as PTAs or PTOs, even though they may include parents, students, businesses, and others interested in the school. Because the requesting organization is not a PTA or PTO, the Department declined to recognize it as exempt under K.S.A. 79-3606(yy).

What this means for you

The PTA/PTO exemption is narrow. Supporting a school is not enough — the group must actually be the school's PTA or a functionally equivalent PTO.

• Booster clubs don't qualify. Clubs supporting sports, bands, or other extracurriculars are outside K.S.A. 79-3606(yy), even if made up of parents and supporters.
• The exemption is broad once you qualify. A true PTA/PTO gets exemption on its purchases and on sales of tangible personal property by or on behalf of it — but only if it meets the definition.
• "One per school" is a signal. There is normally a single PTA or PTO per school with a defined structure and purpose; a separate activity-specific club generally isn't it.
• If denied, the organization's purchases and taxable sales are treated like any other non-exempt entity's.

Common questions

Does a booster club get the PTA sales-tax exemption in Kansas?
No. The Department ruled that booster clubs and clubs supporting sports, bands, or extracurriculars do not qualify as PTAs or PTOs under K.S.A. 79-3606(yy).

What does K.S.A. 79-3606(yy) exempt?
Effective July 1, 1998, it exempts a PTA's/PTO's purchases of tangible personal property and services, and sales of tangible personal property by or on behalf of the PTA/PTO.

What makes a group a PTA or PTO?
A PTA is chartered by the National or Kansas PTA and authorized to operate within the school; a PTO is its functional equivalent. Each operates for one school with a defined structure and purpose.

What happens to a club that doesn't qualify?
It is not exempt under 79-3606(yy); its purchases and taxable sales are treated like any other non-exempt organization's.

Citations and references

• K.S.A. 79-3606(yy) — effective July 1, 1998, exempts a parent-teacher association's or organization's purchases of tangible personal property and services and sales of tangible personal property by or on behalf of it (which the Department held does not cover booster clubs).

Source

• Original ruling (DOCX): https://www.ksrevenue.gov/pildocs/rulings/P-1999-92.docx
• Kansas Policy Information Library: https://www.ksrevenue.gov/prpil.html

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

March 26, 1999

XXXXXXXXXXXXXXXXXXX
XXXXXXXXXXX
XXXXXXXXXXXXXXXXXX
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Dear XXXXXXXXXXXXXXXX:

The purpose of this letter is to respond to your letter dated September 5, 1998.

Effective July 1, 1998, K.S.A. 79-3606(yy) exempts all purchases of tangible personal property and services by a parent-teacher association or parent teacher organization, and all sales of tangible personal property by or on behalf of such association or organization.

For purposes of this exemption, a parent-teacher association is a nonprofit association that is chartered by the National PTA or the Kansas PTA. Such an organization is authorized to operate within the school by the school’s administrators and is composed of teachers and parents A parent-teacher organization is a nonprofit organization that is the functional equivalent of a “parent teacher-association.”

PTA’s and PTO’s operate for the benefit and support of an individual school and have a defined organizational structure with a defined purpose and goal. There is normally only one PTA or PTO per school. Booster clubs or other types of clubs that support sports, bands, or other extra-curricular activities do not qualify as PTA’s or PTO’s, even though they may be composed of parents, students, businesses, and others who are interested in the school or in certain facets of the educational process.

It is the opinion of the Kansas Department of Revenue that your organization is not PTA or PTO. Therefore, the department must decline your request to be recognized as an organization exempt pursuant to K.S.A. 79-3606(yy).

This private letter ruling is based solely on the facts provided in your request. If it is determined that undisclosed facts were material or necessary to make an accurate determination by the department, this ruling is null and void. This private letter ruling will be revoked in the future by operation of law without further department action if there is a change in the statutes, administrative regulations, or case law, or a published revenue ruling, that materially affects this private letter ruling.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 04/02/1999 Date Modified: 10/11/2001

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