Compensatory Education - GASB 34 Search the Guide 1.9.2.4 Exempt Organizations Several regulations impact purchases and sales by exempt organizations. Exempt Organizations As used here, the phrase exempt organizations refers to organizations exempt from sales tax on their purchases of otherwise taxable goods and services. Exempt organizations are not required to pay sales tax on the purchase of tangible personal property or taxable services if the property or service is to be used exclusively for public purposes. There are two ways that exempt status may be obtained. Such requested exemption applies to many private schools.
Statutory exemption includes public school districts.
Therefore, public school districts are statutorily exempt organizations. No written application or other action is required of these organizations to receive exempt status. In the ordinary course of business, a vendor must assume that a buyer's purchase is subject to sales tax unless the buyer presents an exemption certificate. However, a purchase voucher issued by a statutorily exempt organization is sufficient proof of the entity's exempt status. An employee of an exempt organization cannot claim an exemption from tax when purchasing taxable items of a personal nature even if the employee receives an allowance or reimbursement from the organization for the items purchased.