It’s easy to crunch numbers when you are calculating your favorite student athlete’s RBI or rebound average for the season. If you have been part of your booster club for a while, you can probably run through these formulas with your eyes closed.
But when it comes to taxes, you undoubtedly have some questions. This is understandable — your booster club has to adhere to both state and federal tax laws, which can make things a bit confusing. Figuring out whether you need to collect sales tax can be particularly tricky, as some items are tax-exempt and others are not.
Is Any Booster Revenue Tax Exempt?
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.
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Our Club Has Been Using Charms and Has Student Accounts — Why Is This a Bad Idea?
There’s a lot to like about Charms Office Assistant. This program has been a music program stalwart and can help schools and boosters communicate with students, manage assessment data, and collect payments.
We get the appeal of using Charms to support your band’s billing activities — the system is already in place, and you can collect payments from students and parents all in one platform. However, Charms wasn’t really designed for booster clubs. It was really designed to be used by the school or music director.
Most booster clubs are non-profits. The activities and best practices are different. For instance, non-profits can not fundraise for the benefit of one person. They must fundraise for the group as a whole. Also, fees can not be mandatory in a non-profit. You can certainly say “100% participation is highly encouraged,” but you can not require anyone to pay to participate.
By replacing Charms with a purpose-built booster solution, your club can:
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Round Rock Volleyball Is Ahead of the Game by Using BoosterHub MVP
After each sports season, the coaching staff gets together to review what went well and what they can do better next year. Often, coaches will turn to league winners for inspiration. During this process, they analyze film, look at stats, and explore ways to incorporate these insights into their own coaching strategies.
Your athletic booster club can apply these same principles to get better at fundraising during the off-season. On that note, let’s turn our attention to the Round Rock Volleyball booster club and how they’re delivering for student athletes with BoosterHub.
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Is SMS a Good Way to Communicate with Donors and Booster Club Members?
Finding effective ways to communicate with donors and members is a problem as old as your school’s rivalry with the neighboring high school football team. And just like that generation-spanning rivalry, you never seem to be able to maintain the upper hand for long.
During your time as an athletic booster club member, you’ve probably tried a variety of communication techniques, from phone calls to flyers and even email. If that’s the case, you know that none of these strategies are especially effective for relaying information to your membership.
While you’ve probably considered using SMS messaging to talk to donors and booster club members, you may be hesitant to make yet another change to your communication strategy. But trust us — SMS messaging is the way to go. With the right SMS messaging tools in place, you can effortlessly share information, keep parents in the loop about upcoming events, and make 2023 your most productive fundraising year ever.