Sales Tax

The University is not a tax-exempt organization and therefore, is required to pay sales tax on applicable goods and services purchased by the University, as well as collect and remit sales tax for applicable goods and services sold by the University.

There are broadly two audiences to whom Sales Tax is applicable: Purchasers and Sellers. The University operates routinely in both capacities.

University as Purchaser:

Ordinarily, Sales Tax will be collected and remitted by the seller from whom the University buys goods or services.

In the event that an invoice or receipt does not identify Sales Tax withheld by the seller on goods that will be used within the state of Washington, the University is required to report and remit Use Tax, a corollary to Sales Tax whose reporting burden falls on the purchaser. For more on Use Tax, refer to the section below.

University as Seller:

Purchasing Goods for Resale

As a seller, the University is required to both collect and disclose Sales Tax at point-of-sale. When purchasing goods to be sold on to end customers (e.g., concessions, merchandise, apparel, etc.), the University will be required to present a copy of our Reseller Permit granted by the Washington Department of Revenue, which allows the University an exemption from paying Sales and Use Tax to a vendor for any goods to be sold on as a reseller.

If you or your department are engaging in purchase of goods to be sold on to an end customer, please reach out to generalledger@spu.edu with a description of the activities and intent for the purchase in order to be furnished with a copy of the permit to exempt you from paying Sales Tax.

Selling Goods

Upon sale of goods by the University, the selling party is responsible for providing a calculation of Sales Tax on the receipt.

This current rate of 10.35% (effective 4/1/2024) is to be withheld from the price of goods sold.

For example, a $20 retail sale will have $2.07 charged to the customer for Sales Tax for a total cash transaction of $22.07. On the General Ledger, this will appear as $20 in retail sales revenue (5-series account), $2.07 in Sales Tax Payable (22400 series account), and cash received (likely 10114 Payments bank account).

Each tax reporting period, GL Accounting will take the balance in Sales Tax Payable and remit that cash to the taxing authority. For this reason, it is important that each JV submitted recording retail sales has an accurate and complete reflection of the Sales Tax Liability arising from these sales.

Use Tax

Use Tax applies where Sales Tax was not collected and remitted by the seller, usually due to jurisdiction of purchase and use. Where Sales Tax is collected and remitted by the seller for sales to customers within the state, Use Tax applies to buyers of goods as end customers where the use of the goods will take place in a different jurisdiction, often the state, from where it was purchased.

Use Tax is less common than Sales Tax, but in the event the University purchases a good that will not be sold on as a reseller, and Washington state Sales Tax is not collected by the seller, the University is responsible for tracking the Use Tax liability and remitting cash to the Washington Department of Revenue.

Your role in this process is to report appropriate Use Tax Liability. This should be reported in JVs prepared to record the purchase of goods from different jurisdictions according to the published rate (10.35% effective 4/1/2024). This process is similar to Sales Tax, but with Use Tax, the burden for reporting and remittance to the state is on the purchaser.