OUR THOUGHTS ON:

Exempt Entities May be Required to Collect PA Sales Tax

Tax|Not-for-Profit

By Matthew Dodge

In a recent letter ruling, the Pennsylvania Department of Revenue determined that a parent-teacher organization’s sale of items for fundraising purposes did not qualify for the “isolated sale” exemption for sales tax collection. Accordingly, the organization is required to collect sales tax on the sale of taxable items at its fundraising events.

For purposes of the exemption, an isolated sale is defined as infrequent sales of a nonrecurring nature made by a person not engaged in the business of selling tangible personal property. In addition, such sales may not occur more frequently than three times or for more than a total of seven days in any one calendar year.

An exempt organization, with an exemption number (sales tax number beginning with 75), making taxable sales that do not qualify as isolated sales must obtain a sales tax license from the Department of Revenue and collect sales tax on all taxable transactions.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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