Introduction

Financial Compliance and individuals associated with the Pasadena Independent School District are not an authority on tax-related or accounting situations concerning Parent Organizations, Booster Clubs and Exempt Organizations. Parent Organizations, Booster Clubs and Exempt Organizations should obtain competent independent counsel concerning tax and accounting-related circumstances.

Getting Started

STEP 1. FORM A STEERING COMMITTEE

What to Do: Identify mission, establish official name for the organization and recruit an initial board of directors. Become familiar with the Life Cycle of a Public Charity and Pasadena Independent School District board policy.

Public Charity Life Cycle

Life Cycle of a Public Charity

Pasadena ISD Board Policies

Relations With Parent Organizations (GE Local)

Community Relations Nonschool Use of Facilities (GKD Local)

Community Relations School Volunteer Program (GKG Legal)

STEP 2. OBTAIN APPROVAL FROM PRINCIPAL

What to Do: Obtain approval from the campus principal to establish a new parent organization. Link to the approval form is provided below. Once the form is completed, submit to the campus principal for approval.

Parent Organization Registration Approval Form

STEP 3. DEVELOP GOVERNING DOCUMENTS

What to Do: Each parent organization must develop and maintain bylaws that are reviewed on an annual basis by all of the parent organization officers. Bylaws should contain the detail of the rules of membership such as the organization's fiscal year, organizational structure and the method used to elect officers. Each organization must elect a minimum of three officers with two of them being a president and a secretary. However, most organizations will elect a full slate of officers.

Sample-Articles & Bylaws for Corporation

Sample-Articles & Bylaws for Association

Roles of Officers & Committees

Purpose of Conflict of Interest Policy

Sample-Conflict of Interest Statement

STEP 4. EMPLOYER IDENTIFICATION NUMBER (EIN)

What to Do: All organizations that conduct business are required by the IRS to have their own EIN. A member's social security number should not be used as the organization's EIN for banking or other business purposes. Parent Organizations are separate entities and cannot use the District's EIN. Below is the link to apply for an EIN online.

Apply Online for an EIN

Understanding Your EIN-Publication

STEP 5. FILE FOR CERTIFICATE OF FORMATION

What to Do: File for a Certificate of Formation with the Texas Secretary of State. A link with the instructions and application is provided below. Also provided is a link to frequently asked questions.

Texas Secretary of State-Nonprofit Organizations

Certificate of Formation-Nonprofit Organizations

Texas Secretary of State-Frequently Asked Questions

STEP 6. HOLD GENERAL MEMBERSHIP MEETING

What to Do: The general membership should approve the establishment of the organization and approve bylaws. An election of officers should be conducted in accordance with the approved bylaws. Elected officers should obtain a post office box for the official mailing address and select a local bank to open an account.

Robert's Rules of Order

STEP 7. OBTAIN 501(c)3 Exemption

What to Do: Identify mission, establish official name for the organization and recruit an initial board of directors. Become familiar with the Life Cycle of a Public Charity and Pasadena Independent School District board policy.

Applying for Section 501(c)3 Status (e-video)

Applying for Tax Exempt Status

IRS Tax Exemption-Frequently Asked Questions

Top Ten Tips to Shorten the Application Process

Form 1023

Form 1023EZ

STEP 8. APPLY FOR SALES TAX PERMIT

What to Do: If the organization will be selling any taxable items or services it must apply for a Sales Tax Permit thru the Texas State Comptroller's Office. While sales tax exemption apply to purchases necessary to the organization's exempt function, exempt organizations must collect tax on most of their sales.

Sales and Use Tax Introduction

Sales Tax Permit Online Application

STEP 9. SALES AND FRANCHISE TAX EXEMPTION

What to Do: Once 501 ( c )3 designation has been achieved, the organization must apply for an exemption from sales and franchise tax from the Texas State Comptroller's Office. This is done by written request, which includes a description of activities, copies of articles and bylaws and a copy of the IRS letter granting tax exemption. 

Tax Exemptions for Qualified Organizations

Sales Tax Exemption Application

Franchise Tax Exemption Application

STEP 10. SEND COPIES TO PRINCIPAL

What to Do: Send copies of the following documents to the campus principal or their designee. A link to the List of Officers form is provided below. These documents should be kept current.

Bylaws

Employer Identification Number

Letter of Determination

List of Officers

STEP 11. Create Permanent Documents File

What to Do: Put all the documents related to these steps in a "Permanent File" in a safe place to be forwarded to the new officers each year. Also save the file electronically and provide it to several officers to help ensure that the information is safeguarded.

IRS Records Requirements