Texas Sales Tax

Baylor University is exempt from paying sales tax on its purchases; however, student organizations are not to use Baylor's tax-exempt status when making purchases. Registration with and official recognition by Baylor University as a chartered student organization does not give the student organization Texas sales tax exemption status. A student organization may avoid paying sales tax by applying and attaining exempt status with the State of Texas. Sales tax exempt status only allows an organization to avoid  paying sales tax when buying, leasing, or renting taxable items that are necessary to the organization’s mission.

Generally, all student organizations must obtain a sales tax permit and collect sales tax on every taxable item sold, and then remit this money to the State, if the student organization is the seller of more than two sales of taxable items during any 12 month period. An exception to the sales tax permit requirement exists if the sales are made by a qualified student organization. Qualified student organizations are exempt from collecting and paying sales tax to the State Comptroller on the following sales:

  • First $5,000 in Sales – The first $5,000 in total taxable sales held in a calendar year that are not exempted as outlined in the following bullet point.
  • One-Day Tax-Free Sale – Qualifying student organizations affiliated with the University can hold a one day tax-free sale once a month if the primary purpose of the sale is to raise funds for the organization. One day means a 24-hour period. The student organization itself must have a primary purpose other than engaging in business or performing an activity designed to make a profit, and the purpose of the sale must be to raise funds for the organization. If an item is sold for more than $5,000, the exemption does not apply unless the item was made by the organization or the item was donated and not sold back to the donor. When buying taxable items to resell, the student organization may supply the vendor with a resale exemption certificate, showing the student organization as the purchaser and stating the reason for the exemption is that the items are being purchased for resale during such a one-day sale.

To be designated as a qualified student organization, the University must file a University-issued certification with the Texas State Comptroller showing the organization is affiliated with Baylor University. This certification is obtained by sending a request to Student Activities for review in conjunction with the Tax & Compliance Department. The certification is valid until the student organization is decertified, suspended, or otherwise loses its campus privileges or affiliation and the University notifies the State Comptroller.