Form Ap-207-2 - Application For State Tax Exemption

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APPLICATION FOR EXEMPTION – EDUCATIONAL ORGANIZATION

SUSAN COMBS • TEXAS COMPTROLLER OF PUBLIC ACCOUNTS

Nonprofit educational organizations should use this application to request exemption from Texas sales tax, hotel occupancy

tax, and franchise tax, if applicable.

To receive a state tax exemption as an educational organization, a nonprofit educational organization must be devoted

solely to systematic instruction (particularly in the commonly accepted arts, sciences, and vocations) with a regularly

scheduled curriculum, faculty and an enrolled student body or students in attendance at a place where the educational

activities are regularly conducted. An educational organization can also qualify if its activities consist solely of public

groups, forums, panels, lectures, or other similar programs, and the presentations provide instruction in the commonly

accepted arts, sciences, and vocations. Exemption from federal tax as a 501(c) organization is not required to qualify for

exemption from state tax as an educational organization.

Public and private colleges, universities, junior colleges, and community colleges from other states and nations do not

qualify as educational organizations exempt from state hotel occupancy tax.

The exemption for educational organizations is provided for in Sections 151.310, 156.102 and 171.061 of the Texas Tax

Code, and more detailed information can be found in Comptroller’s Rules 3.322, 3.161, and 3.541.

Some organizations will not qualify for an exemption as an educational organization as that term is defined in Texas' law

and rules, even through their activities may be educational in nature. Such an organization might still qualify for exemption

from Texas sales taxes, and franchise tax, if applicable, under certain sections of the Internal Revenue Code (IRC).

Texas tax law provides an exemption from sales taxes on goods and services purchased for use by organizations exempt

under IRC Section 501(c)(3), (4), (8), (10), or (19). However, exempt organizations are required to collect tax on most of

their sales of taxable items. See Exempt Organizations - Sales and Purchases, Publication 96-122.

Texas law also provides an exemption from franchise taxes for corporations exempted from the federal income tax under

IRC Section 501(c)(2),(3), (4), (5), (6), (7), (8), (10), (16), (19) or (25).

If your organization has been granted federal tax exemption under one of the qualifying sections listed above, your

organization will be granted an exemption from Texas sales tax, or sales and franchise tax, on the basis of the Internal

Revenue Service (IRS) exemption, as required by state law.

Organizations that qualify for exemption based on the federal tax exemption are not exempt from hotel occupancy tax

because the hotel occupancy tax law does not recognize any federal exemptions.

The laws, rules, and other information about exemptions are online at:

Send the completed application along with all required documentation to:

Comptroller of Public Accounts

Exempt Organizations Section

P.O. Box 13528

Austin, Texas 78711-3528

We will contact you within 10 working days after receipt of your application to let you know the status of your application. We may require an organization

to furnish additional information to establish the claimed exemption. After a review of the material, we will inform the organization in writing if it qualifies

for exemption. The comptroller or an authorized representative of the comptroller may audit the records of an organization at any time during regular

business hours to verify the validity of the organization’s exempt status.

If you have questions or need more information, contact our Tax Assistance staff at 1-800-252-5555 or, in Austin, call 463-4600.

You have certain rights under Chapters 552 and 559, Government Code, to review, request, and correct information we have on file about you.

AP-207-1 (Rev. 4-07/5)