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Policy 3.1.5
Policy 3.1.5
Policy and Procedures Manual
Classification Number: 3.1.5
Reviewed: August 14, 2017
SUBJECT: EXEMPTION FROM SALES TAX AND HOTEL OCCUPANCY TAX
As an educational institution, the university qualifies for exemption from sales tax and state hotel occupancy tax for purchases made for university use in the state of Texas. Other states may extend exemption status to the university because of our status as an educational institution.
A sales tax exemption certificate and a hotel occupancy tax exemption certificate are available in the business office. These should be obtained and duplicated in sufficient quantities before travel for use with restaurants, hotels and vendors that require a copy of the certificate(s). Vendors with whom we have previously done business have a copy of the certificate and do not need a new one. New vendors will need a copy for their files.
Meals, when traveling, are covered in a special provision of Texas law. Meals for an individual traveling on university business are not exempt from sales tax. Meals for groups (such as an athletic team) are tax exempt. This provision may not be pertinent in other states, so exemption from tax should be requested.
Purchasing policies and procedures require advance authorization of all university purchases. Therefore, appropriate documentation for sales tax exemption is available at the time of the purchase. Invoices received from vendors that include tax will be altered and payment made for the purchase amount only. Approved purchases with university credit cards and with cash advance funds require particular attention. Such purchases require the submission of substantiating receipts or invoices. Taxes are not a valid expenditure of university funds, and if levied, are the responsibility of the purchaser. For purchases made with cash advances, the vendor may request a copy of the requisition to validate that the purchase is for university use.
Because sales tax only passes through vendor accounts for submission to the state, vendors are cooperative in processing the exemption, if documentation is provided for them.
If university personnel purchase items with personal funds without prior approval because of an emergency circumstance, a request for reimbursement may be submitted. If the purchase is deemed necessary for a campus's operations, the reimbursement may be issued upon completion of the approval process. However, because the university is not subject to sales tax and state hotel occupancy tax, reimbursements are not made for the tax portion of such purchases.
Contact for Interpretation: Chief Financial Officer
This policy statement supersedes all previous policy statements on this subject.
Revisions:
- 08/14/2017 - Reviewed
- 03/29/2007 - Reviewed
- 08/15/2004 - Reviewed
- 09/15/2001 - Reissued as policy 3.1.5
- 02/14/1995 - Inception of policy 4.1.3
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