1. Purpose
The purpose of this policy is to ensure that CU 麻豆影院 complies with sales tax regulations for the state of Colorado, county of 麻豆影院, special districts as appropriate听and the city of 麻豆影院.
2. Policy
It is the policy of CU 麻豆影院 to charge sales tax as required by the state of Colorado, county of 麻豆影院, special districts as appropriate听and the city of 麻豆影院.
3. Determining When to Charge Sales Tax
The following list provides assistance in determining whether or not a sale is subject to sales tax:
- Whenever the university sells tangible property, the sale is subject to sales tax requirements.听The definition of tangible property is broad.听If the item being sold can be touched, it鈥檚 probably tangible and therefore taxable.听It is the practice of CU 麻豆影院 to assume that the item or product being sold is taxable, unless specifically excluded by statute.
- The university is exempt from paying sales tax on purchases from its own departments such as internal service centers.听However, students, faculty and staff not acting in their capacity as agents of the university, private companies听and the public must pay sales tax on their purchases from the university.
- Generally speaking, sales transacted using an IN, procurement card (ACARD)听or journal entry are tax exempt.
- Sales tax can be waived for a customer only if the customer provides a copy of their current tax exempt certificates, both for the state of Colorado and the city of 麻豆影院.听To reiterate, the burden of proof for the exemption is on the person asserting the claim of exemption.听Exemption certificate copies must be kept on file by the department making the sale.听This is essential in the event the operation is audited by the Colorado Department of Revenue, and it becomes necessary to justify why tax was not collected and remitted on the respective sale.
Sales of services are not taxable.听If a sale involves both goods and services - such as a repair operation that involves charges for both parts and labor - the parts (tangible property) are taxable but the labor (service) is not.听The seller should list and identify the parts portion of the sale separately from the labor/service portion of the sale.听Failure to do this can render the entire amount of the sale subject to sales tax.
4. Determining How Much Sales Tax to Charge
The amount of sales tax charged depends upon the following factors:
- The type of product being sold and
- The tax rate in effect at the time of the sale and
- Where the sale took place, i.e., where the customer took possession of the product
4.1. Product &听Tax Rate
Exhibit 1听lists items frequently sold on campus and identifies which sales tax rate to apply.
Note: This is not an all-inclusive list of items to be taxed. It is a representative sample. Contact your campus accountant if you have any questions about whether or not a sale is taxable.
4.2. Date of Sale &听Tax Rate
See current sales tax rates.听Sales tax rates are subject to change during both January and July of each year.
4.3. Location of Sale &听Tax Rate
The sales tax rate charged depends upon where the customer takes possession of the goods.听For additional information, refer to the .
5. Items for Special Consideration
5.1. Food Sales
5.1.1.听Non-Taxable Food Sales
Certain types of food sales are not taxable.听听These include:
- Sales of food items from vending machines.
- Meals provided to residence hall boarders as part of a room and board package of at least 30 days duration.
5.1.2. Caution Regarding Vending Machine Food Sales
Certain products, although commonly perceived as a food or beverage, are not considered to be food or beverage items when sold in a vending machine.听These products, therefore, are taxable.听Examples include:
Note: Contact your campus accountant if you have any questions about whether or not a vending machine food sale is taxable.
6. Operational Aspects of Sales Tax
6.1. Displaying the Sales Tax License
CU 麻豆影院 has its own state of Colorado sales tax license and city of 麻豆影院 sales tax license.听Operations that charge sales tax are required to post a current copy of each license in a conspicuous place.听
Copies of these licenses are available from CCO:
6.2. Charging Sales Tax
Sales tax may be charged as a separate line item at the time of the sale.听This is the preferred practice at CU 麻豆影院.听In a limited number of circumstances, it may be permissible to impute sales tax after the fact.听Work with your campus accountant to determine the most appropriate method for your operation.
6.3. Recording Sales Tax
6.3.1. Charging Tax at the Time of the Sale
As stated in Section 6.2 of this policy, charging sales tax as a separate item at the time of the sale is the preferred practice at CU 麻豆影院.听
When the cash receipt is prepared to record the day鈥檚 financial activity, the sales tax liability is listed on a line separate from the revenue. 听
Note: A copy of each cash receipt on which sales tax liability is recorded should be sent to:
Sales Tax 鈥� Campus Controller鈥檚 Office
579 UCB.
This is for audit support.听If this material is not sent to CCO, the department will be responsible for producing the necessary documentation in the event of an audit.
6.3.2. Imputing Sales Tax
A limited number of CU 麻豆影院 departments impute sales tax rather than book it directly.听In this situation, all sales are booked initially into revenue.听At a later date, a journal entry is prepared which moves the appropriate amount of sales tax from a revenue account to the tax liability account.听This method is not recommended except in a few special situations.听Work with your campus听accountant to determine if this method is appropriate for your particular needs.
Exhibit 3, which follows, provides an illustration of imputing sales tax.
7. Departments That Remit Their Own Sales Tax
It is imperative that departments who hold their own sales tax license and/or remit their own sales tax payments stay informed about current tax rates, filing frequency, filing/ payment deadlines and changes in tax regulations.听Resources for such departments include: