2810 Sales & Use Tax

Responsible Official: 
Controller
Responsible Office: 
Controller's Office
Effective Date: 
February 28, 2019
Revision Date: 
September 16, 2019

Policy Sections

2810.1 Sales Subject to Sales Tax

2810.2 Collecting, Recording, and Depositing Sales Tax

2810.3 Reporting Sales Tax

2810.4 Remittance of Sales Tax & Sales Tax Returns

2810.5 Sales Tax Records

Scope

This policy establishes the rules and processes supporting the University’s obligations with respect to Connecticut Sales and Use Tax (“Sales Tax”) on external sales.  It applies to all Yale units and individuals selling goods and/or services in their official University capacity.

Policy Statement

As a seller of goods and services, the University is responsible for:

  • determining when a sale is subject to Sales Tax;
  • charging and collecting Sales Tax, when appropriate, from its customers;
  • remitting the Sales Tax in a timely manner; and
  • maintaining records that document the charging, collection, and remittance of Sales Tax with respect to its sales of goods and services.

Yale units and individuals selling goods and/or services share these responsibilities, as detailed in this policy.

Reason for the Policy

As a seller of goods and services, the University is responsible for complying with legal obligations concerning Sales Tax.  This policy provides the foundation for compliance with those obligations.

Definitions

Connecticut Sales and Use Tax (“Sales Tax”)

The Connecticut Sales and Use Tax is the statewide tax rate imposed on the retail sale, lease, or rental of most goods and taxable services.  The current Sales Tax rate is 6.35%, subject to specific exceptions*.  Visit the Connecticut Department of Revenue Services website for further information.

* Note: Effective October 1, 2019, Connecticut tax legislation modifies to 7.35% the Sales Tax rate applicable to sales of meals and beverages sold by an eating establishment, caterer, or grocery store.  For further information on the applicability of this Sales Tax rate, refer to Connecticut Department of Revenue Services Policy Statement 2019(5).

Policy Sections

Prior to selling any goods and/or services, the selling unit or individual must determine whether the proposed sale is subject to Sales Tax.  The selling unit or individual is responsible for contacting and consulting with the University Tax Department in making this determination.

In certain instances, when the external customer is a tax-exempt organization or a reseller, collection of Sales Tax may not be required on otherwise taxable sales.  In such instances, the selling unit or individual is responsible for collecting and retaining the appropriate exemption and/or reseller certificate(s) pertaining to such sales.

Note: Effective August 1, 2019, Connecticut requires retailers to charge a fee of ten (10) cents for each single-use checkout bag (i.e., a plastic bag with a thickness of less than four mils (the vast majority of single-use checkout bags are less than four mils thick)) provided to a customer at the point of sale.  This is known as the “Plastic Bag Fee.”  Each retailer must indicate the number of single-use checkout bags provided and the total amount of the fee charged on any transaction receipt provided to a customer.

“Single-use checkout bag” does not include: a) a paper bag; b) a reusable plastic bag (four mils or thicker); c) thin plastic bags on a continuous, perforated roll that are used to contain meat, seafood, loose produce, or other unwrapped food items; d) a newspaper bag; or e) a laundry or dry-cleaning bag.  For more information on this State requirement, please visit the Connecticut Department of Revenue Services’ Single-Use Plastic Bag Fee Information Page and Plastic Bag Fee FAQs.

Each Yale selling unit or individual must record and report the total Plastic Bag Fees charged each month at the time they report their Sales Tax activity.

As of July 1, 2021, single-use checkout bags are scheduled to be banned in the State of Connecticut.

If a sale is subject to Sales Tax, the selling unit or individual must appropriately charge and collect the Sales Tax at the current rate.  The selling unit or individual must also record the Sales Tax collection and deposit the collected funds promptly, in accordance with Procedure 2810 PR.01 Sales Tax Collection, Section 2.

All units and individuals with taxable sales receipts must report their Sales Tax activity each month, in accordance with Procedure 2810 PR.01 Sales Tax Collection, Section 3.  A report is required even if there is no Sales Tax activity for a particular month.

The Yale Shared Services Accounting and Financial Services Team, with review by the Controller’s Office, is responsible for the timely remittance of Sales Tax collected on University sales, in accordance with State requirements.

The Yale Shared Services Accounting and Financial Services Team, with review by the Controller’s Office, is responsible for the timely preparation and filing the University’s Sales Tax returns, in accordance with State requirements.

Documentation in support of the charging (including, as applicable, exemption and/or reseller certificate(s)), collection, and remittance of Sales Tax with respect to the University’s sales of goods and services must be maintained in accordance with Policy 1105 Retention of University Financial Records.

Special Situations / Exceptions

Exceptions to this policy must be approved by the Controller’s Office, in consultation with the Provost’s Office, General Counsel, or an Officer of the Corporation, as appropriate.

Roles & Responsibilities

Controller’s Office

  • Responsible for the content and oversight of this policy.
  • Responsible for reviewing and approving exceptions, where appropriate.
  • Responsible for reviewing the monthly Sales Tax reporting transmitted by the Yale Shared Services Accounting and Financial Services Team.
  • Responsible for reviewing and signing the University’s Sales Tax returns.
  • Where appropriate, the Controller’s Office delegates authority to perform any function ordinarily performed by the Controller’s Office.

Selling Units and Individuals

  • Responsible for determining whether proposed sales are subject to Sales Tax, prior to selling any goods and/or services.  This determination is made in consultation with the University Tax Department.
  • When applicable, responsible for collecting and retaining appropriate exemption and/or reseller certificate(s).
  • For sales subject to Sales Tax, responsible for appropriately charging and collecting Sales Tax at the appropriate rate.
  • For sales subject to Sales Tax, responsible for recording and promptly depositing the funds collected.
  • Responsible for monthly reporting of Sales Tax activity.
  • Responsible for maintaining Sales Tax records (pertaining to charging, collection, and, as applicable, exemption and/or reseller certificate(s)), as required by Policy 1105 Retention of University Financial Records.

University Tax Department

  • Responsible for advising University sellers on the taxability of transactions.

Yale Shared Services Accounting and Financial Services Team

  • Responsible for collecting monthly Sales Tax reports from University sellers.
  • Responsible for transmitting monthly Sales Tax reporting to the Controller’s Office.
  • Responsible for the timely remittance of Sales Tax collected on University sales and for the timely preparation and filing of the University’s Sales Tax returns, in accordance with State requirements.
  • Responsible for maintaining Sales Tax records (pertaining to reporting and remittance), as required by Policy 1105 Retention of University Financial Records.