Did you know that units are responsible for collecting and reporting applicable sales taxes when making taxable sales? Taxable sales are typically sales of tangible personal property to an external party (including students/faculty/staff). These types of sales are primarily recorded in self-supporting funds.
However, taxable sales may also take place in other fund types, including gift funds. To determine whether a taxable sale has taken place in a gift fund, consider the following:
- Sales of tangible personal property for fundraising purposes (whether the items were purchased for resale or received via donation) during most types of fundraising activities are subject to sales tax. Thus, sales tax would need to be collected and reported from these types of sales.
- However, sales of tangible personal property for fundraising purposes (whether the items were purchased for resale or received via donation) at a live, silent, or online auction are typically exempt from sales tax, thus there is no need to collect sales tax in these scenarios.
For further guidance related to collecting and reporting sales tax, refer to Collect and Report Sales and Use Tax within Section 22 as well as Section 18.6 – Sales and Use Tax of the Business and Financial Policies and Procedures manual.
Contact
For further details, contact the applicable subject matter experts listed in the Sales Tax section of UAFR’s Who to Ask list.
