Understanding Sales and Use Tax in Arizona
The University in Arizona is not tax-exempt and sales made to the University are subject to sales tax as per the Arizona Revised Statutes. This guide explains what is taxable under sales and use tax, the difference between sales tax and use tax, exceptions to tax rules, and reporting use tax on P-Cards. It also highlights technical exemptions like prescribed drugs and equipment for research and development. Stay informed to ensure compliance with tax regulations in Arizona.
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Presentation Transcript
SALES AND USE TAX The University is not tax exempt!!! In general, all sales made to the University are subject to sales tax imposed by Title 42, Chapter 5, of the Arizona Revised Statutes. Some purchases may be subject to use tax rather than sales tax, depending on the seller s business presence in Arizona. If an out- of-state seller does not invoice a tax amount, the University is required to report use tax.
WHAT IS TAXABLE? The retail sale of tangible personal property and certain services. What does that mean? Anything which may be seen, weighed, measured, felt or touched or is in any other manner perceptible to the senses. 3
SALES TAX If a vendor (either in-state or out-of-state) charges sales tax on an invoice, and it is at least 5.6%, no other tax is due. 4
USE TAX Use tax is the tax on tangible property purchased from an out-of-state vendor that did not collect sales tax. Calculated at 5.6% 5
ANY EXCEPTIONS? Several technical exemptions apply to auxiliary operations, e.g. prescribed drugs and devices sold at Campus Health Services, and printed and other media materials for use in Cline Library. Machinery and equipment used ONLY for research and development. Must complete the Certification Form for Tax Exempt Machinery and Equipment Purchased for Research and Development and upload to PeopleSoft Financials with the other purchase documents. Supply an AZ 5000 to vendor. 6
REPORTING USE TAXONA P-CARD Tax Applicability: Select Use Tax Applicable from the drop down menu. Use Tax: Enter the dollar amount of use tax for the transaction line using 5.6%. Note-the SUT Code Pct: will display incorrectly-this is a bug that has been reported to Peoplesoft. 9
REPORTING USE TAXONA P-CARD Click OK The system automatically routes back to the Purchase Details page. 10
QUESTIONS? If you are unsure if a transaction is taxable, or how to apply use tax on a transaction, contact Ask-FAS@nau.edu. 11
ADDITIONAL RESOURCES Comptroller Policy 120: Sales and use tax on purchases https://nau.edu/university-policy-library/comptroller-policies/ PeopleSoft Financial Training Documentation https://nau.edu/comptroller/peoplesoft-financial-training- documentation/ Arizona Department of Revenue Transaction Privilege Tax https://azdor.gov/transaction-privilege-tax-tpt 12
Questions? 13
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