2810 PR.01 Sales Tax Collection

Revision Date: 
February 28, 2019

Contents

1.     Overview

2.     Record and Deposit Sales Tax

3.     Report Monthly Sales Tax

This procedure provides the general processes for recording and handling Sales Tax that has been collected, in support of Policy 2810 Sales & Use Tax.

University Tax Department

Questions regarding the taxability of transactions and any tax requirements should be directed to the University Tax Department.

General Guidelines

Yale units and individuals selling goods and/or services should, whenever possible, record Sales Tax collections simultaneously with the recording of taxable sales proceeds.  Contact the Controller’s Office for an exception if it is not possible to compute the amount of sales tax when proceeds are recorded.

Once the proceeds and associated tax are recorded, promptly deposit the funds.

Recording Taxable Sales and Associated Tax

When proceeds from taxable sales are ready for deposit, promptly record the sales revenue and associated Sales Tax using Cash Sales.  Enter two lines for each transaction:

  • In the first line, record the income related to the sale with an appropriate COA; and
  • In the second line, record the sales tax collected, using the following COA segments:
    • Company: CO01
    • Yale Designated: [seller’s YD #]
    • Cost Center: [seller’s CC #]
    • Program: PG00363
    • Project: PJ028450
    • Revenue Category: RC261
    • Ledger Account: 20017

Ensure the sum of the amounts equals the total deposit amount.  See Procedure 2801 PR.01 Recording and Depositing Cash Receipts for detailed Cash Sales procedures.

Accounts Receivable Sales Tax – Non-Workday

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), departments record the sales tax via journal entry when the receivable is recorded.  To do so, debit the appropriate receivable COA and credit the following:

  • the appropriate COA for the sales income; and
  • the COA segments below for the amount of sales tax collected:
    • Company: CO01
    • Yale Designated: [seller’s YD #]
    • Cost Center: [seller’s CC #]
    • Program: PG00363
    • Project: PJ028450
    • Ledger Account: 20017

Workday Accounts Receivable Sales Tax

When the buyer is invoiced for the sale and the sale is recorded as a receivable using the Workday Accounts Receivable system, departments record the Sales Tax via the Workday Sales Tax functionality (within the Workday Accounts Receivable system) at the same time the receivable is recorded.

University Sales Tax Report

Every department that has taxable sales receipts must complete and submit Form 2810 FR.01 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.

The department records the sales receipts and taxes collected during the month on the form.  The amounts shown on the form should match the amounts recorded and deposited for that month.  Departments submit the completed form to salestax@yale.edu by the 10th day following the month in which the sales were made.