Could a Girl Scout troop treat the $1 it kept from each mandatory $2 calendar payment as a donation rather than part of the taxable sales price?

Plain-English summary

The council sold calendars to the public for $2. Each troop sent $1 to the council and kept $1, describing the retained amount as a customer donation.

The Comptroller rejected that characterization. Buyers had no option to pay less than $2 if they wanted a calendar, so the full $2 was the sales price. The troop's retained $1 was not freely contributed and therefore was not a donation.

STAR's subject metadata refers broadly to educational-organization exemption, but the operative letter decides only the calendar-price and donation issue described here.

Common questions

Was only the council's $1 share the sales price? No. The full $2 was the price paid for the calendar.

Why was the troop's $1 not a donation? The buyer could not choose whether to pay it.

Citations and references

• 34 Tex. Admin. Code Rule 3.286(d)
• 34 Tex. Admin. Code Rule 3.322(g)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9001L0977F11

Original ruling text

January 26, 1990

Dear **:

Your letter to Edward Ainsworth in the ** Audit Office was
forwarded to me for response.

My understanding of your situation is as follows. The COUNCIL sell calendars to
the general public for $2.00. Each troop remits $1.00 to the Council and keeps
$1.00 for its own use. You state that the public is actually paying $2.00 for
the calendar and donating $1.00 to the troop.

According to Texas sales tax law, a "seller who makes a sale subject to the
sales tax imposed by this chapter shall add the amount of the tax to the sales
price." The sales price of the calendars is $2.00 The $1.00 kept by each troop
cannot be considered a donation since the $2.00 is not contributed freely. In
other words, purchasers do not have an option; in order to receive a calendar
the purchaser must pay $2.00.

I have enclosed copies of sales tax rules that outline the responsibilities of
sellers and purchasers of taxable items and exempt entities. Please review
section (d) of Rule 3.286 and section (g) of Rule 3.322.

This opinion is based on the facts you presented. If there are additional or
different facts, this opinion may change.

Please feel free to contact me if you have additional questions. You may write
me, call toll free 1-800-252-5555 (ext. 3-4685) from anywhere in the United
States or phone 512/463-4685.

Sincerely,

Julie Pesl
Tax Correspondence

cc: Edward Ainsworth, Jr., ** Audit