Excise and Sales Tax: Difference between revisions

From Appalachian State University Policy Manual
imported>Deaskc
imported>Deaskc
Line 19: Line 19:


=== Exemption from Federal Excise Tax ===
=== Exemption from Federal Excise Tax ===
4.1.1 Appalachian State University, being an agency of the State of North Carolina, is exempt from the Federal Excise Tax. The Purchasing Office must furnish the State of North Carolina Exemption Number under which the University is authorized to purchase tax free, to vendors of items subject to the Federal Excise Tax:
4.1.1 The University is exempt from the Federal Excise Tax. The University’s Purchasing Office must furnish the State of North Carolina Exemption Number under which the University is authorized to purchase tax free, to vendors of items subject to the Federal Excise Tax. The North Carolina Exemption Number is _400020.
{|
|FEDERAL TAX EXEMPTION
|-
|CHAPTER 32, INTERNAL REVENUE CODE
|-
|REGISTRY NO. 56 70 0047 K
|-
|FOR EXCLUSIVE USE OF NORTH CAROLINA
|-
|STATE GOVERNMENT AND PUBLIC SCHOOLS
|}


=== State Sales Taxes - Rates and Exemptions ===
=== State Sales Taxes - Rates and Exemptions ===
4.2.1 Other than for those categories of items exempt by law, all purchases of supplies and materials are subject to the inclusion of a 4% (or other applicable rate) State and a 2% Watauga County sales tax as part of the cost. All sales taxes are figured on the total cost of taxable items included. Refer to the following section on items exempt from sales tax for more details.
 
4.2.1 Other than for those categories of items exempt by law (See section 4.3 below), all purchases of goods and materials are subject to the State General and local sales tax. All sales taxes are figured on the total cost of taxable items included.  


4.2.2 Where items are being traded in as part of the payment, the sales tax is figured on original sales cost rather than on the net cost.
4.2.2 Where items are being traded in as part of the payment, the sales tax is figured on original sales cost rather than on the net cost.
Line 40: Line 30:


=== Items Exempted From Sales Tax ===
=== Items Exempted From Sales Tax ===
#Items purchased for resale by the University are exempted at the point of purchase. The sales tax is collected and paid at the point of sale. Procurement requests covering such items must bear the notation, "Tax Exempt - Purchase for Resale." Vendors whose major sales are to a University agency or department which is exempt from the tax must have on file an Exemption Certificate. When appropriate, the Purchasing Office will furnish the vendors with the exemption certificates.
 
#Purchases of services.
4.3.1 To be exempt from sales tax, a University purchase must be:
#Purchases of seed, fertilizers, insecticides, and herbicides.
#Purchased for the University’s use.
#Labor portion of charges for repairs to equipment when labor can be identified as a separate charge.
#Purchased pursuant to a valid purchase order issued by the University’s Purchasing Department  that contains the University’s exemption number  and includes a description of the items purchased.; and  
#Repairs and alterations, such as painting, masonry work, electrical work, plumbing where the order is for the vendor to furnish both labor and material. The vendor pays the tax on the materials that are used and figures the tax in the total cost. If the University buys the materials for a repair vendor to use, then the purchase of the materials is subject to sales tax.
#Be paid for with either a State issued check, electronic deposit, credit card, procurement card, or University credit account. .
#Rental of real property.
#If purchased without a purchase order, the University must provide the retailer with the University’s exemption number.
 
4.3.3 The exemption number cannot be used by contractors or subcontractors of the University to purchase items to fulfill a contract with the University or any other  State agency or by any University employees to purchase food, lodging, or other taxable items paid by the employee from their own funds and reimbursed by the University.
 
4.3.4 A State agency exemption number does not apply to the following taxes and these taxes must be paid to the vendor by the University:
#Prepared food and beverage taxes levied and administered by various local governments in the State.
#Occupancy taxes levied and administered by various local governments in the State.
#Highway use taxes paid on the purchase, lease, or rental of motor vehicles.
#State sales taxes levied on electricity or telecommunications services (except for sales to the NC Department of Transportation).
#Scrap tire disposal tax levied on new tires.
#White goods disposal tax levied on new white goods.
#Dry-cleaning solvent tax levied on dry-cleaning solvent purchased by a dry-cleaning facility.
#Excise tax on piped natural gas.


=== Items Taxable at Special Rates ===
=== Items Taxable at Special Rates ===

Revision as of 17:39, 18 February 2016

Policy 509.19

Introduction

1.1 This policy provides guidance on the applicability of Federal excise taxes and State of North Carolina Sales and Use tax on University purchases.

Scope

2.1 This policy applies to all University purchases of tangible items and services.

Definitions

Excise Tax

Excise taxes are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as highway usage by trucks. One of the major components of the excise program is motor fuel.

Local Taxes

Sales taxes levied by a county, or municipal government, which are applied to the purchase in addition to the state general and county combined rate.

State General Rate

The combined sales tax rate for North Carolina include a state rate and a county rate. Organizations exempt from sales taxes are exempt from this combined rate, but not locally administered rates levied in addition to the state rate.

Policy and Procedure Statements

Exemption from Federal Excise Tax

4.1.1 The University is exempt from the Federal Excise Tax. The University’s Purchasing Office must furnish the State of North Carolina Exemption Number under which the University is authorized to purchase tax free, to vendors of items subject to the Federal Excise Tax. The North Carolina Exemption Number is _400020.

State Sales Taxes - Rates and Exemptions

4.2.1 Other than for those categories of items exempt by law (See section 4.3 below), all purchases of goods and materials are subject to the State General and local sales tax. All sales taxes are figured on the total cost of taxable items included.

4.2.2 Where items are being traded in as part of the payment, the sales tax is figured on original sales cost rather than on the net cost.

4.2.3 Include on Procurement Request - Applicable sales taxes are to be included on the procurement request when requisitioning materials and supplies.

Items Exempted From Sales Tax

4.3.1 To be exempt from sales tax, a University purchase must be:

  1. Purchased for the University’s use.
  2. Purchased pursuant to a valid purchase order issued by the University’s Purchasing Department that contains the University’s exemption number and includes a description of the items purchased.; and
  3. Be paid for with either a State issued check, electronic deposit, credit card, procurement card, or University credit account. .
  4. If purchased without a purchase order, the University must provide the retailer with the University’s exemption number.

4.3.3 The exemption number cannot be used by contractors or subcontractors of the University to purchase items to fulfill a contract with the University or any other State agency or by any University employees to purchase food, lodging, or other taxable items paid by the employee from their own funds and reimbursed by the University.

4.3.4 A State agency exemption number does not apply to the following taxes and these taxes must be paid to the vendor by the University:

  1. Prepared food and beverage taxes levied and administered by various local governments in the State.
  2. Occupancy taxes levied and administered by various local governments in the State.
  3. Highway use taxes paid on the purchase, lease, or rental of motor vehicles.
  4. State sales taxes levied on electricity or telecommunications services (except for sales to the NC Department of Transportation).
  5. Scrap tire disposal tax levied on new tires.
  6. White goods disposal tax levied on new white goods.
  7. Dry-cleaning solvent tax levied on dry-cleaning solvent purchased by a dry-cleaning facility.
  8. Excise tax on piped natural gas.

Items Taxable at Special Rates

  1. Highway motor vehicles are taxed at a 2% rate with a maximum of $300.00 per vehicle.
  2. Purchase of supplies or equipment which are used in the manufacture of a product, such as water and electrical power, or used in a laundry operation are taxed at a 1% rate with a maximum of $80.00 per item.

Additional References

Authority

Contact Information

Original Effective Date

Revision Dates