Exempts receipts from goods sold by elementary or secondary schools from sales and compensating use tax when the purpose is to raise funds

Title of bill

An act to amend the tax law, in relation to exempting receipts from sales of goods by elementary or secondary schools from the sales and compensating use tax

Purpose

Exempts receipts from goods sold by elementary or secondary schools from sales and compensating use tax when the purpose is to raise funds

Summary of provisions

§1 amends subdivision (a) of §1115 of the tax law by adding a new paragraph 44, which exempts receipts from sales tax on goods sold for fund raising purposes by a public or private elementary or secondary school.

§2 amends §1116 of the tax law by adding a new subdivision (h) which exempts from the sales and compensating use tax receipts from retail sales of goods sold for fund raising purposes by a public or private elementary or secondary school.

Justification

This bill would exempt goods sold by a public or private elementary or secondary school for the purpose of raising funds for school-related activities, including school assemblies and field trips, from sales and compensating use taxes.

Currently, schools are required to pay sales and compensating use taxes on goods that are sold through the school for school-related activities. In one case, a local school in Rochester raised approximately $16,000 to $18,000 for school-related activities and had to pay $1,352 in state sales tax.

Schools should be exempt from paying sales taxes on goods sold for school-related activities.

Legislative history

01/09/08 Referred to Investigations and Government Operations.

Fiscal implications

None.

Effective date

Immediately.