Sales Tax Guidelines for P-Card Transactions
Understanding Sales Tax
As It Relates To P-Card Transactions
Patrick Schwartz
Senior Buyer, Purchasing
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Elon University is a not-for-profit (nonprofit) company that IS NOT tax
exempt.
•
That means Elon University is required to pay sales tax.
•
Although Elon pays sales tax, we can submit for reimbursement twice
a year to reclaim North Carolina sales tax.
Sales Tax
cannot
be refunded for the following items:
•
Airfare
•
Auto Rental
•
Fuel
•
Alcohol
•
Utilities (electricity, gas, phone (excluding equipment purchases),
water/sewer, etc.)
•
Occupancy tax for lodging at NC hotels & motels
•
Reimbursement made to employees for sales tax paid for items
purchased on behalf of the University (but not purchased by
University)
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North Carolina is considered a “destination state”.
-This means that any goods or services purchased online with a ship to location
of North Carolina, should include North Carolina Sales Tax.
-Elon is not able to reclaim sales tax outside of state.
•
We can only submit for reimbursement if tax is broken out as a
separate line item on an invoice or receipt or if specified that sales tax
is included in pricing.
•
Ensuring you have legible and itemized receipts becomes extremely
important.
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With Purchase Orders and Check Requests, Accounting is able to
charge the sales tax to a specific budget code when making the
payment.
•
With p-card transactions, the sales tax is initially charged to the
department’s budget and then pulled out by Accounting through a
journal entry.
•
Without proper receipts (itemized), sales tax cannot be pulled out of
the department’s budget.
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When eating at a restaurant in
NC, make sure you have both
the itemized receipt and credit
card receipt.
-the itemized receipt is where the
sales tax is shown.
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When a receipt does not break out the
sales tax but has a message that the
price includes sales tax, we are able to
submit for reimbursement.
•
Divide the subtotal by 1.0675 to get
the taxable amount and then subtract
that from the subtotal to achieve the
sales tax. (24 / 1.0675 = 22.48; 24 –
22.48 = 1.52 tax)
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Common p-card receipts/invoices submitted that are not itemized:
-The Oak House
-Restaurants
-IVARS
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If you are not given an itemized receipt/invoice, ask for one.
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Questions???
Contact Information:
Patrick Schwartz
pschwartz4@elon.edu
purchasing@elon.edu
336-278-5583
Elon University, a nonprofit entity, explains its sales tax procedures for P-Card transactions. Sales tax refund limitations and processes are detailed, emphasizing the importance of proper documentation for reimbursement eligibility, especially in destination states like North Carolina.
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Presentation Transcript
Understanding Sales Tax As It Relates To P-Card Transactions Patrick Schwartz Senior Buyer, Purchasing
Understanding Sales Tax As It Relates To P Understanding Sales Tax As It Relates To P- -Card Transactions Card Transactions Elon University is a not-for-profit (nonprofit) company that IS NOT tax exempt. That means Elon University is required to pay sales tax. Although Elon pays sales tax, we can submit for reimbursement twice a year to reclaim North Carolina sales tax.
Understanding Sales Tax As It Relates To P Understanding Sales Tax As It Relates To P- -Card Transactions Card Transactions Sales Tax cannot be refunded for the following items: Airfare Auto Rental Fuel Alcohol Utilities (electricity, gas, phone (excluding equipment purchases), water/sewer, etc.) Occupancy tax for lodging at NC hotels & motels Reimbursement made to employees for sales tax paid for items purchased on behalf of the University (but not purchased by University)
Understanding Sales Tax As It Relates To P Understanding Sales Tax As It Relates To P- -Card Transactions Card Transactions North Carolina is considered a destination state . -This means that any goods or services purchased online with a ship to location of North Carolina, should include North Carolina Sales Tax. -Elon is not able to reclaim sales tax outside of state. We can only submit for reimbursement if tax is broken out as a separate line item on an invoice or receipt or if specified that sales tax is included in pricing. Ensuring you have legible and itemized receipts becomes extremely important.
Understanding Sales Tax As It Relates To P Understanding Sales Tax As It Relates To P- -Card Transactions Card Transactions With Purchase Orders and Check Requests, Accounting is able to charge the sales tax to a specific budget code when making the payment. With p-card transactions, the sales tax is initially charged to the department s budget and then pulled out by Accounting through a journal entry. Without proper receipts (itemized), sales tax cannot be pulled out of the department s budget.
Understanding Sales Tax As It Relates To P Understanding Sales Tax As It Relates To P- -Card Transactions Card Transactions When eating at a restaurant in NC, make sure you have both the itemized receipt and credit card receipt. -the itemized receipt is where the sales tax is shown.
Understanding Sales Tax As It Relates To P Understanding Sales Tax As It Relates To P- -Card Transactions Card Transactions When a receipt does not break out the sales tax but has a message that the price includes sales tax, we are able to submit for reimbursement. Divide the subtotal by 1.0675 to get the taxable amount and then subtract that from the subtotal to achieve the sales tax. (24 / 1.0675 = 22.48; 24 22.48 = 1.52 tax)
Understanding Sales Tax As It Relates To P Understanding Sales Tax As It Relates To P- -Card Transactions Card Transactions Common p-card receipts/invoices submitted that are not itemized: -The Oak House -Restaurants -IVARS If you are not given an itemized receipt/invoice, ask for one.
Understanding Sales Tax As It Relates To P Understanding Sales Tax As It Relates To P- -Card Transactions Card Transactions Questions??? Contact Information: Patrick Schwartz pschwartz4@elon.edu purchasing@elon.edu 336-278-5583
