FIN-032: Collecting, Reporting, and Remitting Virginia Sales TaxDate: 03/14/2012 Status: Final
- Exceptions for Collecting Virginia Sales Tax
The University is committed to complying with applicable state and local sales tax laws and regulations. University requirements have been established for collecting, reporting, and remitting Virginia sales tax in order to avoid penalties for failure to timely file complete and accurate tax returns.
The individual responsible for a University unit or department that performs a service.
Tangible Personal Property:
Property, other than real property, which may be seen, weighed, measured, felt, or touched, or is in any other manner perceptible to the senses. The term "tangible personal property" shall not include stocks, bonds, notes, insurance or other obligations or securities (as defined in VA Code § 58.1-602).
While the University is exempt from paying sales and use tax on most of its purchases, no similar exemption exists when the University is the seller. Consequently, the University must collect, report, and remit applicable sales tax to the Commonwealth of Virginia in accordance with state law. Accounting Services files and remits sales tax on behalf of the University.
Departments and activity heads must collect Virginia state and local sales tax on behalf of the University for:
The sale of all tangible personal property, except for:
- Textbooks sold to University students; and
- Retail sales of meals to students or others, if the price of the meals is included in room, board, or tuition and fee charges.
- Any services included in the sale of tangible personal property which are not charged separately;
- The fabrication of tangible personal property for consumers, who furnish, either directly or indirectly, the materials used in fabrication; and
The furnishing, preparing, or serving for a fee of any tangible personal property consumed on the premises of the person furnishing, preparing, or serving such tangible personal property.
- The sale of all tangible personal property, except for:
Exceptions for Collecting Virginia Sales Tax:
Except as specifically provided in the Virginia Code, Virginia state and local sales tax is not collected on the provision of services. Some common examples of non-taxable services include, but are not limited to:
- Professional, insurance, or personal service transactions that involve sales as inconsequential elements which are not charged separately;
- Services rendered by repair persons for which a separate charge is made;
- Services not involving an exchange of tangible personal property which provide access to or use of the Internet and any other related electronic communication service delivered electronically via the Internet;
- The amount separately charged for labor or services rendered in installing, applying, remodeling, or repairing tangible personal property sold; and
- Transportation charges separately stated.
[Note: For a complete list of exemptions, refer to Title 58.1, Chapter 6 of the Virginia Code; specifically, Sections 58.1 - 609.1, 609.5, 609.6, 609.10 and 609.11.]
The department or activity head completes the sales tax worksheet (ST-9a) and submits it to Accounting Services on a monthly basis, whether or not there are sales for a month. These worksheets must be submitted no later than the tenth day of the month following the month covered by the worksheet. A copy must be retained in the department.
Late charges incurred based upon a department's failure to meet the monthly filing deadline will be charged to that department.
Accounting Services aggregates University sales tax receipts and electronically remits them to the Virginia Department of Taxation with full payment. The expense is charged to the respective departmental revenue accounts to recover the tax payments made on their behalf.
The department or activity head is responsible for:
- collecting sales tax when a sale in his/her area is subject to the Virginia sales tax;
- properly recording sales tax liability in the University system;
- completing the sales tax worksheet (ST-9a); and
submitting the sales tax worksheet to Accounting Services no later than the tenth day of the month following the month covered by the worksheet.
- The department or activity head is responsible for:
Procedure 5-10, "Completing Sales Tax Worksheet."