Sales Tax on University Purchases
University purchases from vendors located in Virginia:
- The University is a state agency and therefore is generally exempt from Virginia sales tax.
- Primary exception: Food and lodging are generally taxable (see Bulletin 16-3).
- Virginia vendors may request that University purchasers provide an exemption certificate before they agree to waive sales tax.
- Virginia certificate of exemption is available from Procurement.
University purchases from vendors located in foreign states:
- Before 2018, an out-of-state vendor without a phyical location in Virginia wasn't required to charge Virginia sales tax.
- The 2018 Wayfair Supreme Court case requires all major out-of-state vendors to collect sales tax.
- As a result, non-Virginia vendors – even ones with long-standing relationships - may request a Virginia certificate of exemption to document the University’s tax-exempt status.
University purchases while traveling outside of Virginia:
- The University maintains sales tax exemptions in many states outside of Virginia. University travelers can determine whether they are exempt from sales tax by checking the University's tax exemption certificates.
- North Carolina, Indiana and Utah require travelers to pay sales tax and then file for a refund. If a traveller has North Carolina, Indiana or Utah travel receipts, please contact Financial Operations for instructions.
Sales Tax When the University is the Seller
The University is required to pay Virginia sales tax on in-person sales of physical goods occurring in Virginia, as well as on mail-order sales to destinations within Virginia.
The 2018 Wayfair case also requires the University to collect sales tax on goods shipped to states where it has “economic nexus,” defined as annual sales volumes in excess of state-established annual limits. At present, the University has sales tax nexus in the following states: District of Columbia, Georgia, Illinois, Maryland, New Jersey, North Carolina, Pennsylvania, and Ohio.
Purchasers who are tax-exempt or governmental entities, or who are authorized resellers, may be exempt from sales tax. Before exempting a sale from tax, the selling unit is responsible for obtaining a sales exemption certificate from the purchaser valid in the jurisdiction in which the purchaser is located. If located in Virginia, the purchaser must provide the University with a copy of its Virginia Form ST-10 or ST-12 before a tax exemption can be granted.
Sales to Purchasers in Virginia:
- Virginia imposes a 5.3% tax on sales in most jurisdictions (including Charlottesville) with a reduced 2.5% tax rate on the sale of personal hygiene and food items.
- For more detail on sales tax requirements and reporting, see the Virginia Sales Tax instructions.
- Units with Virginia taxable sales must complete VA Form ST-9 before the 6th of each month. Departments are encouraged to use the Electronic ST-9 form.
- For questions about the ST-9 form, see the Sales Tax Training video [insert link] or contact Financial Operations for assistance.
Sales to Purchasers Located Outside of Virginia:
[Need to develop Dynamic Forms process and reporting process]