School Supplies Purchased for Classroom Use

Texas public schools are government entities exempted from the payment of sales tax under Tax Code Section 151.309.

Under Tax Code Section 151.310, nonprofit private schools also may qualify for sales tax exemption, but must apply to the comptroller. See Rule 3.322, Exempt Organizations.

An exempt school or its authorized agent can purchase items tax free by issuing a properly completed sales tax exemption certificate (PDF, 57KB) in the name of the school. A purchase voucher issued by a public school may also be used to claim an exemption from Texas sales and use tax as provided in Rule 3.322(g)(3), and an exemption certificate is not required when a public school pays with a purchase voucher.

A school, or an authorized agent of the school, must issue an exemption certificate to the seller when using a school issued credit card or, as provided in Rule 3.322(g)(4), when making a cash purchase, including personal cash, debit card, credit card or check. An exemption certificate issued by a school can be signed by anyone authorized by the school to make purchases on its behalf.

The school or its authorized agent can purchase classroom supplies tax free for a teacher. If a teacher is an authorized agent for the school, the exemption would apply and the teacher could purchase the item tax free and issue an exemption certificate in the name of the school. A teacher, however, who is not an authorized agent for the school must pay sales tax on items purchased to be used in the classroom, even if the teacher is reimbursed by the school or receives an allowance. See Rule 3.322(g)(5).

Donations

An individual, including a teacher, can purchase taxable items that will be donated to an exempt public or nonprofit school tax free by issuing an exemption certificate to the seller in lieu of tax.

In this case, the exemption certificate is issued in the purchaser’s name and the purchaser must state on the exemption certificate that the exemption is being claimed because the item will be donated to the named exempt school. If the individual uses the item before donating it, however, the exemption is lost and tax is due. See Rule 3.287(e)(5), Exemption Certificates.

Likewise, a parent may purchase educational items tax free if the items are for use in the classroom by any student in need of the items and the items are donated to the school without first being used.

Parents, however, owe sales tax on the purchase of taxable items for their student’s personal use or for a class project, including any required school supplies such as crayons and markers, even if those supplies will be placed in a classroom for communal use by all students in the class.

*Originally published in Tax Policy News; a monthly newsletter about Texas tax policy at http://window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1208.html