PCS 211: Lease/Purchase Equipment
To allow the purchase of lease/purchase equipment
Arizona Board of Regents Policy Manual - 3-607
Purchasing and Business Services
Lease/purchase equipment may be purchased using installment payments over a period of five years or less. Acquisitions costing $1 million or more shall be submitted for approval by the Board of Regents.
Equipment having a life expectancy of one year or more and a unit cost of $5,000 or more that is purchased for basic and applied research in the sciences and engineering is, to the extent permitted by law, exempt from sales tax. Also exempt are designing, developing, or testing prototypes, processes, or new products. This exemption includes research and development of computer software that is embedded in or an integral part of the prototype or new product or that is required for exempt machinery or equipment to function effectively.
For purposes of this exemption, research and development do not include manufacturing quality control, routine consumer product testing, market research, sales promotion, sales service, research in social sciences or psychology, computer software research that is not included in basic and applied research in the sciences and engineering, or other nontechnical activities or technical services.
The exemption of sales tax does not apply to equipment with a life expectancy of less than one year or project cost of less than $5,000. Fabricated equipment acquired at less than $5,000 is capitalized as long as the completed fabrication is greater than $5,000.
If federal funds are involved in the acquisition of equipment for lease/purchase, the principal investigator must first determine that the source of funding permits leasing.
Exceptions to the five-year lease/purchase limitation may be approved by the executive vice president or associate vice president for Financial Services.
To prepare a requisition for the installment purchase, the department:
Purchasing and Business Services:
For information on buying or leasing capital equipment, see the Purchasing and Business Services Policies and Procedures Manual—PUR 602–01, “Lease vs. Buy Considerations.”
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