taxes

Educational Organizations

A qualified nonprofit educational organization is not automatically tax exempt, but can apply for state tax exemption. The organization must be devoted only to instruction (particularly in the commonly accepted arts, sciences and vocations) with a regularly scheduled curriculum, faculty and enrolled students who receive instruction in a place where educational activities regularly occur.

An organization with activities consisting solely of public discussion groups, forums, panels, lectures or other similar programs will also qualify if the presentations provide instruction in the commonly accepted arts, sciences and vocations.

What kinds of exemptions is my educational organization eligible for?

A qualified nonprofit educational organization is exempt from sales, franchise and the state portion of hotel occupancy taxes.

How do we apply for an exemption?

Complete and submit Form AP-207, the Application for Exemption - Educational Organization (PDF), and provide all documentation listed on the application.

If your organization is incorporated, we will review the corporation's formation documents on file with the Texas Secretary of State to verify that the corporation's purpose is consistent with the requirements of this section. Non-Texas corporations must also include a copy of the corporation's formation documents and a current Certificate of Existence issued by their state of incorporation.

If your organization is unincorporated, include a copy of the organization's governing document, such as the bylaws or constitution. The document must show that the organization is nonprofit.

If your application is approved, we'll send a letter or email notification. The notification includes links to print additional verification letters and the exemption certificate (Form 01-339, Texas Sales and Use Tax Resale Certificate (PDF)) to present to vendors.

How do we use the exemption certificate?

When purchasing a taxable item, give the seller a properly completed exemption certificate to document the exempt sale.

If a seller chooses not to accept an exemption certificate, ask the seller to provide a properly completed Assignment of Right to Refund so the organization can request a refund of the tax directly from the Comptroller.

Educational organizations should present Form 12-302, Texas Hotel Occupancy Tax Exemption Certificate (PDF) to a hotel to claim exemption from the 6 percent state hotel occupancy tax. Local hotel tax must be paid, with some exceptions.

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