University of Missouri System

Business Policy Manual

Finance and Accounting

BPM-205 Sales Tax

Revised October 1, 2007

Summary

Detailed are provisions relating to sales tax to be collected on all taxable sales made by the University. Appropriate state, county, city and mass transportation sales tax must be collected on all taxable sales made by the University.

Percent Required Tax To Be Collected On All Taxable Sales

For sales occurring outside the taxing district in which the principal campus is located, only the tax rate applicable at the physical point of sale is to be collected.

Sales tax charged on qualifying food items is 3% less than the normal tax rate.

Textbook sales are exempt from the state portion of the sales tax rate.

Non-Taxable Sales

Sales tax is not collected on the following:

• Sales for resale (retailers must be licensed in Missouri and have an exemption certificate)
• Government, religious, educational institutions
• Sale of tax exempt feed, seed or fertilizer
• Labor or service charges when separately billed (i.e., stenographic services, Medicare reimbursement, veterinary clinic, reactor services)
• Animal sales
• Tuition fees, use and service fees, room and board when part of a room contract, damages, social and fishing fees, parking, keys, etc.
• Rent (If the facility is a place of entertainment, game, or athletic event, rent is taxable.) (If the facility serves rooms to the public for overnight sleeping accommodations or operates a restaurant that serves food to the public, rent is taxable.)
• Advertising (television, radio, newspaper)
• Sale of scrap and miscellaneous occasional sales
• Special services, computer engineering and evaluation projects
• Hay, cotton, soybeans, corn, etc.
• Gift and grants
• Refunds made to the University
• Prescription drugs, insulin and prosthetic or orthopedic devices
• Investments - return of principal to fund
• Other (e.g., postage charged on exports)

Refunding Sales Tax Collected

All refunds made on taxable sales items must include the amount of sales tax collected.

NOTE: In bookstore operations, "buy backs" are purchases for resale, not refunds.

Identifying Sales Tax

Tickets

All tickets subject to sales tax must have printed, stamped or otherwise endorsed thereon, the words, "This ticket is subject to (applicable %) sales tax."

Receipts, Sales Slips, Etc.

The amount of sales tax collected must be identified and set forth separately on each:

• Cash register receipt
• Sales slip
• Credit card sales slip
• Invoice

Depositing Sales Tax Collected

All sales tax collected must be reported as income on a Cash Receipts Report and deposited with other cash receipts.

REFERENCE: BPM 209 Revenue Accounts provides a web site which details the accounts to be used to code all income (revenue).

Computing Sales Tax Due from Departments

Monthly, UM System Accounting will compute the amount of sales tax due from each department based on previous month's taxable deposits. That amount will be charged back on a mechanical Journal Voucher, prepared and processed by UM System Accounting, reducing the depart¬ment's income.

Additional Sales Tax Information

Additional information about sales tax and charts detailing the amount of tax to be collected for various sales amounts are available from the campus business office.