Sales/ Use Tax Exemptions
Last updated
November 16, 2009 9:55:39 AM PST
If you purchase goods/ services for your department, follow the guidelines on this page to avoid costly tax errors.
Evaluate each item for tax applicability
An audit by the California State Board of Equalization found that some department buyers apply tax to items on department orders that are tax-exempt.
Generally, do not apply sales or use tax on:
- Items delivered outside California and used more than 90 days
- Transactions with these governments/ agencies:
- State governments/ agencies in all 50 states, (e.g., state universities)
- U.S. governments/ agencies
- Foreign governments/ agencies
- Materials/ parts for fabrications, where fabricated items are ultimately used outside California (Only apply sales 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
- Occasional sales (less than three sales in a 12-month period)
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 service charges if designated as a separate line item on the purchase order, purchased separately, or the buyer can acquire the services "at will" from any source
- Computer software received electronically
- Computer software maintenance, where upgrades are received electronically
*Exempt from tax only in certain situations
Note: Computer software is complicated. For more clarification on software and other exemptions, see the UC Sales and Use Tax Manual.
Other types of exemptions
The California State Board of Equalization Sales and Use Tax Regulations define many conditions when UCSD transactions are exempt from sales and use tax. These exemptions depend on the transaction's nature and require a final determination by the purchasing director.
