UCSD
CAMPUS NOTICE
University of California, San Diego
 

OFFICE OF THE ASSISTANT VICE CHANCELLOR -
BUSINESS AND FINANCIAL SERVICES
March 20, 1996
KEY ADMINISTRATORS/KEY SUPPORT STAFF SUBJECT: Sales Tax Increase
Reference: PPM 300-23, State Sales Tax - The University as a Seller
PPM 523-2.3.2, Applicability of State Sales Tax to
Purchases of Goods and Services
Beginning April 1, 1996, the state sales and use tax rate for San
Diego county will increase from 7% to 7 3/4%. The increase results from the March 31, 1996 expiration of the San Diego County Justice Facility Tax Refund Claim Period.
The new tax rate will apply to University of California, San Diego (UCSD) purchases and sales subject to state sales or use tax. The following is a summary of guidelines that will affect UCSD as both a buyer and as a seller:
PURCHASING
All UCSD purchase orders for tangible personal property (goods), rentals and certain specific services placed on or after April 1, 1996 will be subject to the 7 3/4% tax rate. The tax regulation also states that the applicable tax rate is the rate in effect at the time goods or services are delivered. Departments should scrutinize invoices for purchase orders placed before April 1 using the 7% tax rate but for which goods were received after March 31. Departments should adjust invoices to reflect the 7 3/4% rate.
Exceptions such as purchases of goods for resale are exempt from the application of state sales or use tax.
INVOICES
Payment of invoices dated April 1,1996 and thereafter will include 7 3/4% tax (unless otherwise exempted) and will have the amount reflected in the Operating Ledger either as a sales tax or as use tax.
For invoices issued by vendors residing within San Diego County, the Operating Ledger will show a 7 3/4% sales tax included in the invoice total remitted to the vendor.
Invoices issued by vendors residing outside San Diego County that do not reflect the proper San Diego County sales tax rate will be processed with the new tax rate of 7 3/4%. The Operating Ledger will show the sales tax included in the invoice total remitted to the vendor and any incremental adjustment as accrued use tax. For invoices issued by vendors residing outside San Diego County which do not reflect any sales tax, the Operating Ledger will show the 7 3/4% use tax as a separate line item.
SALES ACTIVITIES
Activities performing cashiering functions and those departments preparing University invoices for which sales tax is applicable will be impacted by the increase in the sales tax rate. Please note that this increase applies only to the sale of goods delivered within San Diego County. The tax rate of 7 1/4% remains the same for sales of goods delivered to California locations outside San Diego County, and sales of goods delivered out-of-state are not subject to California State Sales Tax. Upon request, the General Accounting Division will provide copies of the 7 1/4% and 7 3/4% tax schedules and a listing of the cities within San Diego County.
To meet sales tax reporting requirements, it is imperative that sales tax be recorded at the proper amount and in the proper account. Rules for applying the two sales tax rates and the related general ledger accounts and/or ISIS accounts receivable/cashiering system detail codes that must be used for accounting are as follows:
Rate Rule Account/(Detail Code)
7 3/4% Sales of tangible personal property 215513 (TX___1)
delivered within San Diego County.
7 1/4% Sales of tangible personal property 215515 (TX___2)
delivered by common carrier to
California locations outside San
Diego County.
NOTE: 69997A is the correct fund to use with either sales tax
account.
Tax detail codes are comprised of the letters TX followed by a three (3) letter code identifying the department, then a 1 or 2 as described above. For example, the detail code for a 7 3/4% sale made by the Biology department would be TXBIO1. The sales tax amount must be calculated and entered on the invoice.
For additional information regarding the application, payment, and collection of the new tax rate, please contact:
Purchasing.....................x44436 - Roy Brown Invoices.......................x40541 - Alicia Cole Sales Activities...............x44951 - Patricia Lee-Leonard
Donald A. Larson
Assistant Vice Chancellor -
Business and Financial Services