Did American Red Cross chapters making taxable sales have to obtain Texas sales-tax permits, pay the permit fee, and collect tax despite governmental-entity status?

Plain-English summary

The Comptroller reaffirmed that Red Cross chapters were governmental entities but changed the prior permit-fee advice after receiving an attorney general opinion.

Any governmental entity making taxable sales had the same seller duties as a private or exempt organization. Red Cross chapters making taxable sales had to obtain a permit, pay the required permit fee, and collect and remit Texas sales and use tax.

Common questions

Did Red Cross governmental status change? No.

Did that status eliminate seller obligations? No.

What duties applied? Permit, fee, collection, and remittance.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8910L0964B14

Original ruling text

October 24, 1989

Dear ***:

I am writing to advise you of a change regarding payment of the permit fees that are
due for Texas sales and use tax permits by governmental entities.

I wrote you on July 21, 1988, regarding this issue stating that chapters of the Red
Cross are governmental entities. That was and remains to be true.

However, since the date of my letter, further investigation has been made into whether
a governmental entity is required to pay the permit fee. This information was sent to
the attorney general's office and a request for an opinion to determine whether
governmental entities were exempt from or required to pay this permit fee.

The attorney general issued an opinion which takes the position that any governmental
entity engaged in making sales of taxable items must pay the permit fee. The
requirements of seller's are the same regardless of their status as a private entity,
governmental entity, or exempt organization. Therefore, all governmental entities,
including the American Red Cross, making taxable sales are required to collect and
remit the Texas sales and use tax, are required to be permitted, and must pay the
required permit fee.

I will be sending this information to all chapters which I wrote. Please pass this
information along to any chapters with whom you are in contact.

This opinion is based on the facts presented. If there are additional or different
facts, the opinion may change.You may also write to Tax Correspondence, Comptroller
of Public Accounts.

Sincerely,

Tax Policy Division
Tax Correspondence