2810 PR.01 Sales Tax Collection

Revision Date: 
April 21, 2008

1 – Overview

Legal Responsibilities

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
  • maintaining records that document the charging, collection and remittance of sales tax with respect to its sales of goods and services. 

This document provides general procedures for recording and handling sales tax that has been collected.

University Tax Office

Questions regarding the taxability of transactions and any legal requirements should be directed to the University Tax Department at 432-5530.

2 – Record and Deposit Sales Tax  

General Guidelines

It is generally advisable to record sales tax collections at the same time that you record and deposit taxable sales proceeds.

  • If it is not practical to compute the amount of sales tax when proceeds are deposited, contact General Accounting at ga.gl@yale.edu for assistance in developing adequate sales tax processing procedures.

Always credit sales tax to 0025590.00.0040[Division code].214001.Your Organization.02:

      Project: 0025590 – the University central sales tax project

      Task: 00

      Award: 0040[Division code] –Balance Sheet Accounts

      Object Code: 214001 – CT Sales Tax

      Organization: Your Organization

      Balancing Segment: 02 – required for on-line data entry.

Once the proceeds and associated tax are recorded, deposit the funds promptly. There is no need to send additional documentation to General Accounting at the time of the deposit.

Recording Taxable Sales and Associated Tax

When proceeds from taxable sales are ready for deposit, promptly record the sales revenue and associated sales tax in RIF.

  • Use the Miscellaneous Revenue transaction type.
  • Enter two lines for each transaction:
  1. In the first line record the income related to the sale, with an appropriate PTAEO.
  2. In the second line record the sales tax collected, with PTAEO 0025590.00.0040[Division code].214001.Your Organization.02.
    • Be sure the sum of the amounts equals the total deposit amount.

See Procedure 2801 PR.01 for detailed RIF procedures.

Accounts Receivable Sales Tax

When the buyer is invoiced for the sale and the sale is recorded as a receivable, i.e., the sale is made on an accounts receivable basis, record the sales tax via JSA when you record the receivable.

  • Debit the appropriate receivable PTAEO.
  • Credit:

1.  the appropriate PTAEO for the sales income.

2.  0025590.00.0040[Division code].214001.Your Organization.02 for the amount of sales tax collected.

3 – Report Monthly Sales Tax

University Sales Tax Report

Every department that has taxable sales receipts must complete and submit a Form 2810 FR.02 University Sales Tax Report each month.

A Sales Tax Report or written notice is required even if there is no sales tax activity for the month.

Record the sales receipts and taxes collected during the month on the form. The amounts shown on the report should match the amounts recorded and deposited for that month. Submit the completed form to General Accounting by the 10th day following the month in which the sales were made.

For assistance, contact ga.gl@yale.edu.