Most booster clubs are considered nonprofit organizations. As such, they don’t pay any federal income tax. However, this does not exempt them from other taxes, such as sales tax.
For the most part, booster clubs will need to collect and pay sales tax on at least some of the items they sell. This includes things like shirts, some food items, and other consumer products.
The good news is that many states provide booster club revenue exemptions, but some do not. In order to learn more about sales tax rates in your own state, view this Concession Stand Sales Tax Rules by State chart.
Sales tax rates are not the only thing that fluctuates from state to state. Each state also has its own rules regarding which tax exemptions booster clubs are eligible for.
If your state does offer an exemption for your booster club, it probably comes in the form of a “concession sales exemption.” States with this exemption do not require booster clubs to charge any sales tax when selling food and beverages at the concession counter.
Additionally, your club may be able to purchase some items that are exempt from sales tax. This can help you save money when buying items for club-sponsored events.
Federal vs. State Tax Exemptions
Before we transition to the bottom of the ninth, it’s important to clarify the distinction between state and federal tax exemptions. Even if your state requires you to pay sales tax, your booster club is almost certainly exempt from paying federal income taxes due to its nonprofit status.
Still, it is important that your booster club consult with a tax professional. Additionally, you must keep detailed financial records after each event so you can track your total revenue and set aside the appropriate amount for any tax obligations. This will help you support the home team while also avoiding any penalties from the state.
How to Maximize Booster Club Revenue
In addition to concessions and other limited sales tax exemptions, some states occasionally offer “tax-free” days. Familiarizing yourself with these tax-free days is an excellent way to generate more revenue for your team or group.
You could capitalize on tax-free days by scheduling fundraisers or other events on those dates. For instance, you could book a car wash, a BBQ, or another single-day event to avoid rerouting any funds to cover state taxes.
If your state offers tax-free days, it likely schedules several per calendar year. Some states even offer extended tax-free periods, such as tax-exempt weekends. Multi-day tax exemption periods present a prime opportunity to raise funds.
Knowing Sales Tax Laws Is Critical
Raising funds for young athletes or fine arts students is a noble pursuit. However, if you want to do so effectively, knowing your state tax laws is vital.
Once you better understand your state’s tax laws, you should also consider investing in a booster management platform. Top solutions have an abundance of features that will help you track revenue, comply with tax laws, and keep everyone on the same page.
Combining the right tech with a little tax law knowledge can make this your most successful fundraising year yet.
You may also like this
No items found.
BoosterHub – The #1 Booster Club Software
In an October 2022 press release, Yahoo! Finance recognized BoosterHub as the #1 booster club software in this emerging industry. Since it launched, BoosterHub has experienced championship-level growth. In just nine months, BoosterHub surpassed the $1 million gross merchandise volume threshold.
BoosterHub’s overnight success speaks to the fact that the dynamic platform fills a long-standing void in the school booster club space. As of the press release, BoosterHub has more than 5,000 members and facilitated over 45,000 transactions. Our platform has an incredibly low single-digit churn rate, which is undoubtedly due to the fact that our customers are extremely satisfied with the product.
No items found.
Does My Concession Stand Need a Food Service License?
A concession stand is one of the most effective ways for your booster club to raise money for sports teams. However, if you have never run a concession stand before, you undoubtedly have tons of questions about it. Running a successful concession stand is not quite as simple as it may appear. In order to do so, you need to familiarize yourself with food service requirements, explore state tax laws, and much more.
The good news is that there are great resources to jumpstart your efforts. In addition to creating this beginner’s guide, the team at BoosterHub frequently tackles important concession-related topics. In this post, we take a deep dive into food service licensing requirements for concession stands. Whether you are already running a successful concession stand or have recently taken over these responsibilities for your booster club, this playbook will help you comply with state and local guidelines.
No items found.
Athletic Booster Clubs vs. Sports-Specific Boosters
For decades, athletic booster clubs (ABCs) have worked to raise funds for athletic teams and fine arts groups across the nation. Traditionally, one athletic booster club will serve all athletes at a school, regardless of the sport. However, in recent years, a new trend has begun to emerge. Several schools have broken away from the centralized ABC fundraising model and now form separate booster clubs for each activity or athletic endeavor. While having a centralized booster club for an entire campus certainly has advantages, the more modern approach also has its appeal. Let’s examine the pros and cons of the classic approach and highlight why the new school model is gaining traction on campuses nationwide