Business Policy Manual

Finance and Accounting

BPM-205 Sales Tax

Revised October 1, 2009

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

            REFERENCE:  Missouri Department of Revenue, Sales/Use Tax

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

For sales of qualifying food items, the State rate is reduced 3%, from 4.225% to 1.225%.

            REFERENCE:  RSMo 144.014

Textbook sales are exempt from the state portion of the sales tax rate when purchased by a student who possesses proof of  current enrollment at any Missouri public or private university, college or other postsecondary institution of higher learning offering a course of study leading to a degree in the liberal arts, humanities or sciences or in a professional, vocational or technical field, provided that the books which are exempt from state sales tax are those required or recommended for a class.  Upon request the institution must provide at least one list of textbooks to the bookstore each semester.  Alternately, the student may provide to the bookstore a list from the instructor, department or institution of his or her required or recommended textbooks.  This exemption shall not apply to any locally imposed sales or use tax.

EXEMPT SALES

Sales tax is not collected on the following:

• Sales for resale (retailers must be licensed in Missouri and have an exemption certificate)
  • All sales of grain bins for storage of grain for resale
• Government, religious, educational institutions
  • All sales made by or to religious and charitable organizations and institutions in their religious, charitable or educational functions and activities and all sales made by or to all elementary and secondary schools operated at public expense in their educational functions and activities
  • All sales made to any private non-for-profit elementary or secondary school
• Sale of tax exempt feed, seed
  • All sales of feed additives, medications or vaccines administered to livestock or poultry in the production of food or fiber,
  • All sales of pesticides used in the production of crops, livestock or poultry for food or fiber.
  • All sales of bedding used in the production of livestock or poultry for food or fiber
  • Notwithstanding other provisions of law to the contrary, all sales of pesticides or herbicides used in the production of crops, aquaculture, livestock or poultry
• The sale of a service (unless a specific statute authorizes the taxation of the service when separately itemized from any tangible personal property.
• Animals or poultry used for breeding or feeding purposes
  • All livestock sales when either the seller is engaged in the growing, producing or feeding of such livestock or the seller is engaged in the business of buying and selling, bartering or leasing of such livestock
• Tuition fees, use and service fees, room and board when part of a room contract, damages, social and fishing fees, and parking.
  • All amounts paid or charged for admission or participation or other fees paid by or charges to individuals in or for any place of amusement, entertainment or recreation, games or athletic events, including museums, fairs, zoos and planetariums, owned or operated by a municipality or other political subdivision where all the proceeds derived there from benefit the municipality or other political subdivision and do not inure to any private person, firm, or corporation.
• 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, billboards)
  • Newsprint, ink, computers, photosensitive paper and film, toner, printing plates and other machinery, equipment, replacement parts and supplies used in producing newspapers published for dissemination of news to the general public.
  • The sales of advertising by legal newspapers, advertising agencies, broadcast stations, and standardized outdoor billboard advertising is considered the sale of services and not the sale of tangible personal property. Purchases of tangible personal property which are for use in producing advertising by the businesses listed shall be deemed to be purchases for use or consumption and not for resale. Sale of these services are exempted from the computation of the tax levied, assessed or payable.
• Sale of scrap
• Miscellaneous occasional sales (Non-regularly carried on sales occurring less than annually. Annual sales are not considered occasional)
• Special services, computer engineering and evaluation projects
• Hay, cotton, soybeans, corn, etc.
• Insulin and prosthetic or orthopedic devices
  • Hearing aids, hearing aid supplies
  • Drugs which may be legally dispensed by a licensed pharmacist only upon a lawful prescription of a practitioner licensed to administer those items, including samples
  • Medical oxygen, home respiratory equipment and accessories
  • Hospital beds and accessories
  • Ambulatory aids
  • Manual and powered wheelchairs, stairway lifts, Braille writers, electronic Braille equipment
  • Scooters, reading machines, electronic print enlargers and magnifiers, electronic and augmentative communication devices, items used solely to modify motor vehicles to permit the use of such motor vehicles by individuals with disabilities - these items only if purchased by or on behalf of a person with one or more physical or mental disabilities to enable them to function more independently.
  • Over the counter or nonprescription drugs to individuals with disabilities.
• Investments - return of principal to fund
• Other (e.g., postage charged on exports)
• Retail sales shipped to customers in any other state or country.
• Rentals of films, records or any type of sound or picture transcription for public commercial display
• Sales of tickets to any collegiate athletic championship event held on a neutral site in a facility which is owned or operated by the University.

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 a sales tax."

REFERENCE:  MoRS 144.020

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 Credit Card Sales) and deposited with other cash receipts.

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

REFERENCE:  APM 10.10.80 - Expenditures - Sales Tax

SALES TAX COLLECTION FROM DEPARTMENTS

Monthly, Office of the Controller will compute the amount of sales tax due from each department based on previous month's taxable revenues.  That amount will be charged back on a System generated Journal Entry, processed by the Office of the Controller, reducing the department'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.