UC IRVINE ADMINISTRATIVE POLICIES AND PROCEDURES

Business and Financial Affairs

Accounting

Sec. 701-12: Guidelines on Sales and Use Tax

Responsible Office: Accounting & Fiscal Services
Revised:
December 2016

References / Resources

Contact: Accounting & Fiscal Services at (949) 824-6788

A. Sales Tax

Retail sales to UCI by California retailers are subject to sales tax. The obligation for the payment of California sales tax lies with the retailer, not the purchaser. State laws require the retailer to charge sales tax to the purchaser at the time of sale.

B. Use Tax

A use tax obligation arises when UCI purchases a commodity which is taxable under California State Sales and Use Tax Law, but for which the retailer has not billed, or the retailer is not licensed to collect California sales tax. The current rates for use tax are the same as for sales tax. The liability for payment of use tax belongs to the purchaser (UCI).

C. Purchases for Resale

No sales or use tax is imposed on purchases made for resale. The UCI resale permit number (SR-EA-24-141560) must be provided to the seller when material for resale is purchased. Purchase orders that are non-taxable will indicate the UCI resale permit number.

D. Federal Contract and Grant Purchases

University purchases funded by a federal contract or grant are not taxable if title to the goods/services vests in the federal government. Each contract or grant and the regulations of the related agency should be reviewed to determine which purchases are subject to sales or use tax.