PTOs, PTAs to benefit from new state law

In a rare show of unity and bipartisanship in an unusually contentious Legislative session, Arkansas legislators were unanimous in support of state Rep. Mark Lowery (R-39, Maumelle).

Lowery, last December, filed a bill that would reduce the taxes paid by public school groups like Parent Teacher Associations, Parent Teacher Organizations or similar on various fundraisers.

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The House vote was held Feb. 25 and passed 94-0, with six not voting.

Along the way, Lowery’s measure, now known as House Bill 1023, picked up additional co-sponsors in Representatives Joe Jett (R-56, Success) and David Ray (R-40, Maumelle) while state Sen. Mark Johnson (R-15, Little Rock) was the primary sponsor in the state senate.

It went to the state Senate on April 20 and passed 34-0, with one excused absence.

The bill can be read by clicking here, but the relevant portion is:

“Arkansas Code § 26-52-401, concerning sales tax exemptions for various products and services, is amended to add an additional subdivision to read as follows:

(42)(A) Gross receipts or gross proceeds derived from sales of tangible personal property, specified digital products, a digital code, or services by a parent teacher organization, a parent teacher association, or a similar organization that is:

(i) An organization described in 26 U.S.C. § 501(c)(3), as in effect on January 1, 2021; and

(ii) Affiliated with a public school.

(B) As used in this subdivision (42), "public school" means any school operated by a public school district or any open-enrollment public charter school, as defined in § 6-23-103.”

The PTO of the Maumelle Charter School brought the situation to Lowery’s attention, and as noted in the school newsletter sent to parents and other stakeholders last week, that it “was required to pay state and local sales tax on the proceeds obtained from the fall festival ticket sales. This equated to the PTO paying several thousand dollars in sales tax.”

It was sent to the governor’s office on April 21 and April 25, the bill became law as Act 873.

The bill will become effective on July 1.