Office of Shared Accountability → Auditing → Sales Tax

Frequently Asked Questions

Sales Tax

Our teachers incorporate the use of publications such as "Time for Kids" in the classroom. The students purchase these publications, use them in the classroom, and then take them home. Are these considered taxable sales? Yes! The State's guidelines as to whether the sale of an item is taxable relates to the possession of the item. Generally, if the purchaser of the item maintains possession of the item after the sale, then the transaction is taxable (with the exception of some food sales). The school must collect and remit sales tax on these sales.

1. What kinds of items that are sold at the school are subject to sales tax remittance to the Comptroller? When the school purchases items that will later be resold to students or community members, sales tax is generally collected on the sales and remitted to the Comptroller. The school should collect and remit Sales and Use tax for items such as planners, magazine subscriptions, gym uniforms, athletic equipment, books, and school supplies if the student owns them after the sale.
   
   There are some exceptions, though. Call the Internal Audit Unit at (301) 517-8198 if you have questions.
2. The new school store sponsor sold items at the school store but did not include the sales tax in the amount collected from students. Are we still responsible for remitting the sales tax? Yes, your school is responsible for remitting this tax, even if it was not collected from students.
3. My school has a tax exemption certificate. Does that mean that the school does not have to collect and remit sales tax to the Comptroller? No! The tax exemption certificate is issued for items that are purchased by the school system in relation to the instructional program. Therefore, when school employees buy things that are to be used and kept within the school system, they are not required to pay sales tax at the time of purchase.
4. My school sold some tee shirts that we didn't make a profit on! Do we still owe sales tax? Yes, the school must collect tax on sales even if the items being resold sold at or below cost. In addition, the school must collect tax on sales even when the items were donated.
5. How do I know when sales tax is due? Each school should receive a notice from the Comptroller of Maryland listing the due date. Some schools are required to pay sales tax on a monthly basis, some on a semi-annual basis, and some on an annual basis. If a school does not receive a notice from the Comptroller of Maryland, contact the Internal Audit Unit.
6. Sales tax is a confusing topic. Where can I go to get more information? The Internal Audit Unit can be used as a resource if there is a question as to whether a transaction constitutes a taxable sale. The State of Maryland Comptroller's Website can also provide valuable information related to the Sales and Use tax.