Utah students to get tax-free textbooks
Textbooks may not be getting any cheaper, but at least Utah students won’t have to pay sales tax on course materials due to a reinterpretation of an existing tax code by the Utah State Tax Commission.
Under the current code, universities with a 503(c)(3) designation from the IRS, which USU has, can qualify for an exemption in Utah Code Section 59-12-104(8) that provides for sales tax exemption for religious or charitable institutions, which can include the sale of textbooks, according to a statement released by Pam Hendrickson, Utah State Tax Commission chair.
In a statement issued Jan. 31, Hendrickson said, “If a state university receives a Section 501(c)(3) designation from the IRS and the sale of textbooks is part of its regular religious or charitable functions and activities, the sale qualifies for the exemption.”
With the clarification of the state tax commission, the USU Bookstore can now sell course materials, including textbooks, without charging sales tax. Celestyn Hollingshead, public relations officer for the USU Bookstore, said course materials includes all materials required by teachers for a class but not other items, such as pens or notebooks. Starting April 1, students will be able to purchase textbooks sales tax free.
The reinterpretation by the tax commission comes after years of student lobbying for state lawmakers to create a bill providing for tax-free textbooks. Ashley Johnson, ASUSU executive vice president, was one of the student lobbyists who helped organize and promote the lobbying efforts. She said the reinterpretation is a good thing for students, but there is still lobbying work to be done.
“The cost of textbooks is one of the biggest things we hear student complain about,” Johnson said. “We saw this as a good first step to curbing that cost.”
Johnson said the lobbying efforts were focused on getting a tax-free bill passed, and that was part of a larger goal to help state representatives see how much higher education actually costs and that something needs to be done to assist students. Because this goal hasn’t been completely met, Johnson said student lobbyists will continue their efforts. Johnson said the lobbyists are working in conjunction with Rep. Greg Hughes, R-Draper, to get these measures passed, and Hughes asked the students to continue to lobby.
“We were told to keep lobbying for it because more than anything, once it went through, we wanted representatives to know how much support there was behind it so they would be pleased when the exemption went through,” Johnson said. “It really is about the bigger picture. Even if the bill failed, we had people down there three times a week handing out fliers and meeting with legislators about the high cost of education. It’s about the small initiative and the bigger picture. Hopefully our presence there will influence future initiatives.”
What the reinterpretation of the code means for students is a savings of 6.35 percent, the sales tax rate, on course materials, which could average out to a savings of around a dollar a week, said Eric Corrington, owner of the Logan Beat the Bookstore.
“Textbook prices are high, and after tuition, it’s the next most expensive thing on the list they can knock down,” Corrington said.
While the tax commission’s exemption benefits the USU Bookstore, it does nothing for private companies who sell textbooks, like Beat the Bookstore, Corrington said. Even without the benefit, Corrington said he doesn’t think it will affect his business too much, but he does wonder how exactly USU and its bookstore qualify as a charity.
“The state is paying for a good chunk of the operating costs for USU. Every operation on campus is designed to make money. The USU Bookstore exists not just to serve professors’ needs, but to make money, more than meeting its operating costs. They have to make a profit. That by definition makes them a for profit,” Corrington said. “The code exists to benefit organizations that meet the designation of charity or religious institutions. That’s great. I’m very interested to see how USU says it’s a charity for tax purposes. What they want to do is benefit students, which is a good thing. I don’t know if that’s the best way for USU to use its time and money when there are a multitude of ways it could be used to benefit students.”
Regardless of what USU or its bookstore does, Corrington said the sales-tax free textbooks is a good break for students, but when it comes down to purchasing textbooks, the best overall deal will still win, whether that’s online, through Beat the Bookstore or the USU Bookstore.
“I think USU will be saving themselves a lot of money in the long run doing this, but at the same time, the transaction is at the personal level, and the economics of it are you are saving less than a dollar per week by not having sales tax at the USU Bookstore. That’s just reality. It will be interesting to see how this unfolds. I think Beat the Bookstore still has the best value, and I think we have been looking out for students’ textbook price and selection needs more than the USU Bookstore has, when we opened two years ago.”
-seth.h@aggiemail.usu.edu