Sales Tax Information
Out of State Vendors
If a sale originates in California, and possession of the item is taken in California, then sales tax applies. There are cases where a vendor based out of state has business ties to California, and they are also required to charge sales tax. If an out-of-state vendor does not collect California sales tax, the university must pay a
use tax to the State of California.
The Problem:
To ensure that taxes are collected, a tax line is automatically generated for all Purchasing Card transactions with an out of state vendor. The system has no way of knowing that an out of state vendor already charged taxes, so a use tax may be paid for an out-of-state vendor who has already collected sales tax.
The Solution:
If you notice that the transaction has been taxed twice (once by the vendor and once by the system), please complete the Purchasing Card Duplicate Tax Form. Tax Accounting will automatically receive a copy of this form via e-mail and will reverse the duplicate tax from your transaction. As appropriate, Tax Accounting will add the vendor to a table so that a duplicate tax will not be added to future purchases. You will receive confirmation of the correction from Tax Accounting via e-mail.
Incorrect Sales Tax Rate
The rate of sales tax applied to a purchase is based upon the state rate, plus any applicable district tax. The district rate applied, if any, should be based upon where possession was taken. If you believe that a vendor charged the incorrect tax rate, please contact them directly.
If a purchase is being delivered to your department, the tax rate calculated is based on the zip code assigned to the organization associated with the card account number. You can verify the zip code assigned to the organization by using the Organization Lookup (49) in DaFIS Decision Support.
If the organization default zip code needs to be changed (for example, changing a core campus delivery zip code from 95616 to 95616-5270), refer to the guide on updating your organization information.
For more tax information, visit the Tax Accounting web site.
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