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Business Procedures Manual

3.6 Sales Taxes on Institutional Purchases

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Purchases made by University System of Georgia institutions related to normal campus operations or purchases for resale are not subject to sales taxes. Some purchases utilizing agency funds, however, will be subject to sales taxes. The Georgia Department of Revenue determines what purchases are subject to sales taxes, and should be contacted if an interpretation is required.

Sales tax exemption forms should be provided to vendors to eliminate sales tax from appearing on invoices or from being collected at the time of sale. The timing of when to provide the sales tax exemption form is influenced by the type of purchasing activity. There are two basic types of purchasing activity, as indicated below:

  1. Invoiced Sales: Generally these are sales to the institution from vendors that have an ongoing sales relationship with the institution. Once a standard sales tax exemption form has been provided to the vendor, no further action is required. As a normal policy, purchases initiated via purchase order also provide notice to the vendor that it is a tax-exempt sale.

  2. Miscellaneous purchases, including petty cash purchases and purchasing card purchases: Without receiving some notification at the time of the sale, these types of sales are likely to appear to be sales to individuals by the vendor and therefore subject to sales tax. It is very important that institutional personnel provide a tax exemption certificate to the vendor at the time of making the purchase. Each institutional procurement office must insure that all personnel making these types of purchases are given adequate instructions and proper forms to eliminate sales taxes from being charged to the institution.

Generic Sales Tax Exemption forms may be obtained from the Georgia Department of Revenue.
However, institutions are encouraged to print their own sales tax exemption forms that include institution-specific information such as name, address, and sales tax ID number.