I am the vp fundraising for a new PTA organization. I am being questioned on whether we should have paid tax on a recent tshirt order. We collected donations/sponsors that were printed on the tshirts. We did NOT charge the parents/kids for these shirts, rather 'gave them away'. I provided our tax exempt cert to the company, and they did not charge us tax for these 'free' shirts. However, one of the board members feels that this was in error and we should be paying tax since we didn't resell these shirts. Does anyone have any advice or ruling on this type of situation?