Sales Tax Collection & Deposit
To: Department Heads and Administrators
From: William E. Lobb, Manager of Financial Reporting
Re: Sales Tax Collection & Deposit – Your responsibilities on behalf of the University
The University is exempt from sales tax, in most instances, for its purchases. However, the University is not exempt from the collection of sales tax from its customers. The University is required to collect and remit the appropriate State, RTD/CD and City sales tax on all taxable sales. All colleges, departments, agencies and other selling entities will make a good faith effort to comply with the State and City Statutes and Regulations.
The University’s Sales Tax Exemption is not Transferable to Faculty, Staff, Students or Other Customers
If a sale of tangible property does not fall within one of the listed exemptions, sales tax must be collected. Several specific areas are often times questioned as to their taxability; however, there are no exemptions which exclude these sales. Sales tax must be collected on the following transactions:
I. Department sales to faculty, students and employees.
II. Casual or isolated sales. Includes fund raising sales.
III. Sales by student organizations.
This list is not exhaustive. It is intended to list certain types of sales which may be encountered during the University’s operations.
I. Sales to Government Entities.
II. Sales to Religious or Charitable entities. (Exemption does not apply to individual members of the organization, unless they too are exempt) Evidence of exemption must be supplied. Transactions involving tax exempt customers a Colorado Sales Tax Exemption Certificate is required. If an organization is considered exempt from Federal Income Tax based on their status as an Internal Revenue Service Section 501(c)(3) not-for-profit organization, they are also not required to pay Colorado State Sales Tax. Colorado based organizations must file for state exemption and present their certificate as proof of exemption, the certificate should be copied and kept on file for at least 3 years. In the case of non-Colorado based organizations, an IRS Determination Letter is acceptable since it shows their 501(c)(3) tax-exempt status.
III. Sales delivered out of Colorado. Sales of articles delivered to the purchaser out of the state by common carrier, by the University or by mail, provided the articles are to be used outside of the state.
This list is not exhaustive. It is intended to list certain types of sales which may be encountered during University operations
Sale of Books: The purchase of books that are resold to students must either have sales taxes paid to the original vendor or collected by the selling department from the student and deposited accordingly. The sale of books or publications that are not included in the tuition or fees of an educational event are taxable transactions.
Yearbook sales are taxable sales.
Fund raisers: Whenever a charitable organization purchases tangible personal property which is to be transferred to another for personal use and all or part of the price of the goods is recouped from the user through direct payment, donation or games of chance, the organization’s exempt status does not apply and sales tax must be paid to the vendor by the exempt organization. Reg.§ 26-114.1 (a)(II).
A charitable organization which makes regular sales of tangible personal property to the public that otherwise meets the definition of a retailer must have a sales tax license and collect and remit sales tax in the same manner as any other retailer. The fact that the merchandise sold may have been acquired by gift or donation, or the proceeds are to be used for charitable purposes, does not make the sale exempt from tax. Reg. § 26-114.1 (a)(II).
The University does hold a sales tax license for occasional sales by departments and will allow a department either to pay the vendor the sales taxes for tangible personal property that it wishes to sell for fund raising events or collect the appropriate sales tax from the purchaser and deposit the collections accordingly.
It is a department’s responsibility to document that they have either paid the vendor or collected the proper sales tax on the sale of tangible personal property.
Recording Taxable Transactions:
Generally, a department will use a cash receipt to deposit funds into a departmental FOAP. The sales tax is to be included on separate lines of the cash receipt using the FOAPs outlined in the tables below.
The Controller’s Office reconciles and remits the sales tax collections to the Department of Revenue on a monthly basis.
Departmental Sales of Merchandise
Food and Beverage Sales
Phipps Conference Center
Conference and Event Services
Department of Residence
Conference and Event Services
Mountain Evans Lodging is out of RTD & City and should only charge state sales tax and deposit to 13232-21060- Own Organization
Program + - When depositing to a general ledger account the program code is not required.
Main Campus Bookstore Sales
Calculating Sales Taxes Collected:
In many instances a department does not wish to calculate sales taxes on each individual sale but would rather calculate sales tax collections on the entire or total sales collected. It is then necessary to calculate the net sales and the appropriate sales taxes collected. The following provides the necessary formulas to make such calculations.