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Learn about possible tax implications when conducting business with UC San Diego

  • UC San Diego is subject to California sales tax, when applicable. Suppliers registered to do business in California should charge sales tax when it is due. 
  • UC San Diego may be required to withhold federal or state income tax when services are provided. California nonresident withholding is required on all services totaling over $1,500 in a calendar year when the services are physically performed in California. 
  • Sales Tax: California is a seller-liability state when it comes to sales tax. A California retailer who does not collect the sales tax from the purchaser is simply electing not to reimburse itself for the sales tax. The obligation remains with the retailer and cannot be transferred to the purchaser in the event the sales tax remains unpaid to the state.

More information about sales and use tax and nonresident withholding can be found on the Franchise Tax Board website: https://www.ftb.ca.gov/

Only the issuance of a resale certificate by the purchaser to the retailer will transfer the liability of the sales tax to the purchaser. The purchaser then becomes responsible for collecting the sales tax at the time of resale. If the purchaser subsequently decides to self-consume the item originally purchased for resale, the purchaser would be liable for use tax on the item.

  • Use Tax: If you are an out-of-state vendor who is not licensed to collect sales or use tax, the University will accrue the tax and directly pay the state. Note: Any supplier doing business within the state, as defined by the California State Board of Equalization, is subject to audit by the Board on any of its transactions with California entities.

When sales or use tax applies

When sales or use tax doesn't apply

  • Funds being used are within non-taxable guidelines of a contract or award
  • Goods or services are tax-exempt
  • Items purchased are for resale

Synopsis

  • Purchases of tangible personal property, such as photocopier machines or toner cartridges, are taxable.
  • Services, such as maintenance or repair, are generally not taxable. However, any consumables supplied in the course of making the service call are taxable.
  • In most cases, our purchases are not for exempt use or resale. You will need to make your tax determination based upon each purchase transaction.