Financial Services Manual (FIN)
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| Effective: 5/1/1985 |
Revised: 11/1/2009 |
![[ASU logo]](asu.gif) |
FIN 108: Sales Tax |
Purpose
To define university sales transactions subject to Arizona sales tax
Sources
Arizona Revised Statutes (ARS) § 42-5001 to 6010
Arizona Administrative Code, R15-5-101 to R15-5-2242
Arizona Department of Revenue
University policy
Background
For convenience purposes, most refer to Arizona’s taxing structure as a “sales tax.” The State of Arizona is not a “sales tax” state; rather, it is a “Transaction Privilege Tax” (TPT) state. Under this taxing structure, the vendor/seller is responsible for paying the state of Arizona for the privilege of doing business in this state; it is not a tax on the purchaser. If the vendor/seller so chooses, they can pass on the cost of the transaction privilege tax to the purchaser. Hence, in this policy, we will refer to the tax as a “sales tax.”
The university has one Arizona sales tax license covering all taxable sales. The Tax Unit in Financial Services is responsible for remitting sales tax payments to the Arizona Department of Revenue. Departments desiring to sell goods or services need to contact the Tax Unit in Financial Services at 480/965-8479 to determine whether the sales are taxable and, if taxable, for the procedures to be followed.
Responsibility for making inquiries to Financial Services for sales tax considerations and collection of the sales taxes rests with each university department. Financial Services’ responsibility is to facilitate the overall sales tax process and provide guidance to departments.
Policy
The university is subject to Arizona sales tax; however, this sales tax does not apply to interdepartmental transactions and sales that are casual or inconsequential at the university level. The sales areas subject to sales tax are listed in the table below. D
| State Sales Tax Categories | ||
|---|---|---|
| Tax Area | Definition | Tax Rate |
|
Admissions to movies, athletic events, concerts, plays, etc., are considered amusements other than for activities or projects of bona fide religious or educational institutions; hence, this provision exempts amusement sales for which ASU is the sponsor or promoter. | 6.3% |
|
Sales of printing applies to job printing, engraving, embossing, and copying. | 6.3% |
|
Retail sales include tangible personal property, except textbooks sold by the ASU Bookstore. | 6.3% |
|
Publishing revenues include sales of newspapers, magazines, or other periodicals, including gross income from subscriptions. | 6.3% |
|
Includes rental or leasing of any tangible personal property. | 6.3% |
|
Commercial rentals of real property are subject to sales tax. Rentals of 30 days or more for residency purposes are exempt. | .5% |
Goods Purchased for Resale
Goods purchased for resale can be exempt from state sales at the time of purchase; however, they are not exempt from city sales tax. City sales tax must be paid on goods purchased for resale when billed by the vendor.
Caution: In order to take advantage of the state sales tax exemption on goods purchased with the intent to resell them, departments must then collect state sales tax at the time of the retail sale to the customer. Additionally, the department must then remit and record the state sales tax collected at the time of the retail sale in the university accounting system for inclusion in the university-wide monthly tax return prepared and filed by Financial Services.
Rental of Real Property
Before execution, leases with a life of 12 months or more and/or leases valued at $200,000 in total lease payments need to be given to the Tax Unit of Financial Services to review for adherence with state tax reporting requirements.
ASU Foundation
Proceeds from the sale of tangible personal property or subscriptions must be deposited with the university if the transaction requires that the department collect and pay sales tax to the State of Arizona. Proceeds from such sales cannot be deposited with the ASU Foundation because it is not established to collect, report, and remit sales tax.
Tax Exemption Certificates
Departments that do not collect sales tax because of the tax exempt status of their customer are responsible for obtaining and keeping on file a copy of the customer’s tax exemption certificate. The certificate documents the reason for the exemption within the guidelines of the Arizona Revised Statutes. Tax exemption certificates should be obtained on a sale-by-sale basis. Each sale made by a department should be considered separately to determine if the transaction is truly tax exempt. Blank copies of the certificate can be obtained from Financial Services for the customer to complete.
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