School Districts Washington State Department of Revenue. Discussion Topics. Overview of Washington s Tax Structure 04/15/2013.

Transcription

1 School Districts Washington State Department of Revenue Tina Greene & Tina Greene Ethan Sattelberg dor.wa.gov May 2013 Discussion Topics Overview of Washington s Tax Structure Income derived by School Districts Non-Enterprise Activities Enterprise Activities Other Income Fundraising Schools as Consumers Overview of Washington s Tax Structure 1

2 Business and Occupation (B&O)Tax Overview Gross receipts tax on engaging in business No deduction for expenses No state income tax Tax classification/rate based on business activity Retail Sales Tax Overview Buyers owe sales tax on consumer goods and retail services Retailers must collect and remit to the state Buyers and Sellers can be liable for sales tax when: not collected collected at the wrong rate Retail Sales Tax Overview continued Sales tax is due on the total selling price, including charges for labor, materials, shipping, & itemized expenses In general, sales tax must be separately stated Rate is determined by where the buyer received the goods or services (Comprised of State (6.5%) and local portion of the rates) 2

3 Use Tax Companion to the retail sales tax Due on personal property, digital products and retail services acquired for use in WA when sales tax was not paid Tax rate is based on location of first use Due on the value (generally the purchase price including delivery charges) Use Tax Generally use tax applies to: Purchases from another state Purchases from a person not authorized to collect retail sales tax Personal property acquired with the purchase of real property For schools this includes items such as books, computers, prewritten software, office furniture, art, musical instruments, sports equipment Income From Non-Enterprise Activities 3

4 Non-Enterprise Activities Activities exclusively governmental (related to providing public education) or Funded by less than 50% user fees Reporting Non-Enterprise Activities Non-enterprise activities are: Exempt from B&O Tax However, retail sales tax must be collected and remitted on retail sales (unless a specific exemption applies) Examples of B&O Tax and Sales Tax Exempt Non- Enterprise Activities Non-enterprise activities which are not reported include: Sales of meals and beverages to students, faculty, and staff Charges for admission to school events Charges for academic transcripts Shop & lab fees 4

5 Income From Enterprise Activities Enterprise Activities Activities which are generally operated in a manner similar to private business and Funded over 50% by user fees Reporting Enterprise Activities Enterprise activities are: Subject to B&O tax Sales tax must be collected on retail sales 5

6 Examples of Enterprise Activities Retail enterprise activities: Sales of surplus equipment Sales of meals to the public or guests of students Non-retail enterprise activities: Commission income from vending machines Advertising income Other Income Renting School Facilities If it is an enterprise activity, funded over 50% with user fees. Income from renting general school facilities is: Subject to Service and Other Activities B&O tax. Retail sales tax does not apply. Income from renting amusement and recreation facilities is: Subject to Retailing B&O tax; and Retail sales tax applies. 6

7 Student Stores School is considered the consumer of all items sold through student store School pays sales tax to vendors (except on items exempt from sales tax such as prepackaged food) School is exempt from B&O tax on student store sales School does not charge sales tax to students Yearbooks and Class Rings Schools: When a school is responsible to pay a vendor, sales tax is owed Schools do not need to pay B&O tax or collect sales tax on sales to students ASB s: An ASB may purchase and resale yearbooks as a fundraiser as long as the sales do not constitute a regular place of business ASB does not pay B&O tax or collect sales tax PTA & ASB Fundraising 7

8 Exempt Fundraising by PTA s and ASB s May purchase for resale without paying sales tax using: Reseller Permit Streamline Sales Tax Certificate; or Multistate Certificate May sale goods during qualifying fundraiser without paying B&O tax or collecting sales tax. Qualifying vs. Non-Qualifying Examples of Qualifying Fundraisers: Bake sales Spaghetti Feeds Car washes Auctions Examples of Non- Qualifying Fundraisers: Stores, Booths and Concession Stands with regular hours Ongoing Website sales Fundraising in Conjunction with a Commercial Business ASB makes sales, collects money, keeps commission, gives balance to for-profit business ASB is exempt from B&O tax on commissions ASB must: Ensure business registered in WA Collect sales tax & turn over to business to report Commercial Business does not qualify for exemption Business must: Remit sales tax to the Department Pay B&O tax on the gross sale 8

9 Schools as Consumers Schools as Consumers Generally, school districts must pay retail sales tax or use tax on all purchases. This includes: Retail Services Equipment & Supplies Prewritten Software Remote Access Software (RAS) Digital Products (DP) DP & RAS Free of Charge Exemption Exemption is available to school districts for DP and RAS made available free of charge to the general public. Right to broadcast, rebroadcast, transmit, retransmit, license, relicense, distribute, redistribute, or exhibit the digital product, in whole or in part, to the general public General public, with respect to libraries, includes all authorized library patrons 9

10 School districts should complete Digital Products and Remote Access Software Exemption Certificate Examples of Other Purchases Generally Not Subject to Sales Tax or Use Tax Payment processing services Website development and maintenance Internet Access & Online storage Speakers and Live Presentations Janitorial Services Questions 10

11 DOR Resources Available Personal Assistance Telephone Assistance Available Monday through Friday - 8:00 am to 5:00 pm hour automated services Written Assistance For general tax questions: For binding rulings: dorrulings@dor.wa. gov binding based on the facts provided and current law DOR Web Site Taxpedia - Access and search: (Laws, Rules, Published Determinations, Excise Tax Advisories, Tax Topics Articles and Special Notices) Industry Guides Receive Updates Request a Speaker or Audit Consultation 11

12 Thank You 12