Tip: When you create a department order, make sure you evaluate each individual item for tax applicability.

An audit by the California State Board of Equalization found that some department buyers have applied tax to items on department orders that are tax-exempt. If you are a department buyer, follow the guidelines on this page to avoid costly tax errors.

Generally, do not apply sales or use tax on:

• Items delivered outside California and used more than 90 days
• Transactions with state governments/ agencies in all 50 states, (e.g., state universities)
• Transactions with U.S. governments/ agencies
• Transactions with foreign governments/ agencies
• Materials/ parts for fabrications, where fabricated items are ultimately used outside California (apply sales tax, but not use tax)
• Items that UCSD buys from a vendor to resell to a consumer; certify this exemption by providing vendors with the University of California Resale Certificate #SXFH-25-610105

Specifically, do not apply sales or use tax on:

• Remote Internet access
• Advertising
• Consulting services
• Exempt subscriptions*
• Exempt mailing lists*
• Installation services
• Optional equipment maintenance agreements
• Page charges
• Radiation monitoring services
• Testing services where only data is received
• Training services
• Shipping/ mailing/ freight/ UPS charges/ FedEx charges
• UPS "hazardous charge" (FedEx, etc. may add similar charges for shipping certain materials)
• Laboratory services where only data is received
• Repair labor
• Recalibration labor
• Exempt sutures*
• Maintenance charges if the maintenance services can be acquired "at will" by the buyer from any source and are designated as a separate line item on the purchase order, or are purchased separately
• Computer software received electronically
• Computer software maintenance, where upgrades are received electronically

Note: Computer software is a complicated subject. For further clarification on software and other exemptions, see the Sales and Use Tax Workshop handout.

*Exempt from tax only in certain situations

Other types of exemptions: The California State Board of Equalization Sales and Use Tax Regulations define many conditions under which UCSD transactions may be exempt from sales and use tax. These exemptions depend on the nature of the transaction and require a final determination by the purchasing director.

Questions? Contact Purchasing, (858) 534-3084, or a member of the Disbursements Payment Assistance and Resolution Team.