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Sonoma State University - CMS Finance Page 1 of 2 Sales Tax Business Policies Sales and Use Tax Specific rules for sales and use tax may be obtained from the “California Sales and Use Tax Law” booklet, and also from the BOE website www.boe.ca.gov/faqs/faqpurch.htm. Key rules are: 1. All purchases of tangible personal property are taxable unless specifically exempted. Examples of tangible personal property include furniture, giftware, toys, antiques, and clothing. 2. Services are not taxable. 3. Shipping is not taxable. 4. Handling charges are generally taxable. 5. If delivery and handling is combined into a single amount (for example the invoice shows a single amount for “postage and handling” or “shipping and handling”), the portion of the charge that represents handling is generally taxable, while the portion that represents delivery may or not be taxable. Ideally shipping and handling charges will appear as separate charges. Tax Withholding Accounts Payable reviews the tax withheld on invoices received from vendors. Accounts Payable may adjust payments to vendors for invoices as follows: 1. Vendors and Receipt of goods in Sonoma County If a vendor overpays the tax on an invoice for commodities received in Sonoma County, Accounts Payable will under-pay the invoice (pay less than the invoiced amount) by the amount of overpayment. If the vendor underpays the tax on an invoice (or pays not tax at all), Account Payable will accrue the tax shortfall via the “zero line” method. Payment to the vendor will be at the invoiced amount, and Accounts Payable will pay the tax due to the state and county directly. 2. Vendors and Receipt of goods outside of Sonoma County Sonoma State University - CMS Finance Page 2 of 2 Commodities received outside of Sonoma County (whether within California or another state) are not subject to Sonoma County taxes. Accounts Payable will honor whatever the tax shown on invoices received, and payment will be made on the invoiced amount.
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