Question: PTA changing to PTO - Remaining account funds and sales taxx exemption

Hi - I have two questions - we are a PTA that has voted to change to a PTO - We have the new EIN, are incorporated in our state, and are working on the 1023 submission. Our state tax Dept instructed us to apply for the sales tax exemption - stating it should be no problem even without the 501(c)3 status yet granted - we have doen this - but our request is still in process. I assume that we therefore, must chagre sales tax on our FAll wrapping paper fundraiser. Is this correct?? Also, can I just write a check to the PTO from the old PTA account (with proper documentation - i.e. stating the organization change and writing a check from one non-profit to another). Thank you

Asked by Guinman



Advice from PTO Today

Rockne writes:
Hi Guinman - Really sounds like you guys have your ducks in a row. Both os those questions are likley state specific. Sales tax is always a stae-level issue, so you should ask your state tax department about whether you need to charge sales tax this fall. Wouldn't be surprised if there's a way around that. Alternatively, can you wait a couiple of weeks on the sale? On the donation issue, you might wnat to check your state PTA bylaws just to see what's said there. One alternative on that front is to make a donation from the PTA to the PTO just because you want to (PTAs are allowed to donate to 501c3s, provided they get approval from membership, etc.), as opposed to doping at part of the disband process. Once you've made the legal donation and have little or zero in your PTA bank account, the you could go through the formal disband steps. Disbanding from PTA is certainly less complicated when there are no assets to argue about. Tim

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