Tax-Exempt Status and Letters of Determination

PTAs in California generally are not required to pay taxes on income earned. California State PTA has secured from the Internal Revenue Service a group (blanket) tax exemption letter under Section 501(c)(3) of the Internal Revenue Code.

Unincorporated PTAs also have received an exemption letter from the California Franchise Tax Board confirming PTA’s exemption from state franchise or income tax under Section 23701d of the Revenue and Taxation Code.

Separately incorporated PTAs must secure their own California Franchise Tax Board letter of exemption.

Both the federal and state exemption letters cover unit, council and district PTAs. The president of the PTA that needs the exemption letters must contact the California State PTA office to request a copy of the PTA’s letter of determination.

To retain the tax-exempt status, PTAs must be careful that fundraising does not become a primary focus. An individual unit can have an effect on the entire association. Unit, council and district PTAs do not pay tax on income from activities that are substantially related to the purpose for which the PTA was given exempt status.

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