FIN-032: Collecting, Reporting, and Remitting Virginia Sales Tax

Date: 03/14/2012 Status: Final
Last Revised: 04/24/2018
Policy Type: University
Oversight Executive: Vice President for Finance
Applies To: Academic Division and the College at Wise.
Reason for Policy:

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.

Definition of Terms in Statement:
  • Activity Head:

    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).

Policy Statement:

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. Financial Reporting and Operations files and remits sales tax on behalf of the University.

  1. Collection:
    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.
  2. 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.]

  3. Reporting:
    The department or activity head completes the sales tax worksheet (ST-9a) and submits it to Financial Reporting and Operations 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.

  4. Remitting:
    Financial Reporting and Operations 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.

  5. Responsibilities:
    1. 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 Financial Reporting and Operations no later than the tenth day of the month following the month covered by the worksheet.
    2. Financial Reporting and Operations is responsible for:
      • aggregating University sales tax receipts;
      • remitting such receipts on a monthly basis to the Virginia Department of Taxation; and
      • charging the respective departmental revenue accounts to recover the tax amount paid on their behalf.
  6. Compliance with Policy:
    Failure to with the requirements of this policy may result in disciplinary action up to and including termination or expulsion in accordance with relevant University policies.

    Questions about this policy should be directed to the Contact Office.

Procedures:

Please see the Tax Policies and Resources website, specifically, the Retail Sales and Use Tax Instructions for University of Virginia Departments and Units Engaged in Taxable Sales listed under the "State Sales and Excise Taxes" heading on that page. Additional questions should be directed to the Contact Office.

Related Information:

Virginia Department of Taxation, Sales and Use Tax

Major Category: Finance and Business Operations
Next Scheduled Review: 04/24/2021
Approved by, Date: Policy Review Committee, 03/31/2011
Revision History: Updated 4/24/18.
Supersedes (previous policy):
V.A.3, Responsibility for the Collection, Reporting, and Remittance of Virginia Sales Tax.