Sales and Use Tax Collection Policy

I.  Effective Date 

May 2024 

II.  Last Revision Date 


III.  Responsible Party

University Financial Services 

IV.  Scope 

All employees are subject to this policy.   

V.  Purpose 

Marymount University (MU) “University” is committed to complying with applicable state and local sales tax laws and regulations. University requirements have been established for collecting, reporting, and remitting sales tax to avoid penalties for failure to timely file complete and accurate tax returns. 

VI.  Policy Statement 

The University is exempt from paying sales and use tax on most of its purchases, but no similar exemption exists when the University is the seller. Consequently, the University must collect, report, and remit applicable sales tax to the Commonwealth of Virginia and to any state in which it has established economic nexus. University Financial Services files and remits sales tax on behalf of the University. 

VII.  Definitions 

Activity Head 

The individual responsible for a University unit or department that performs a service. 

Economic Nexus 

A financial connection between a state and a non-resident seller sufficient to permit the state to assert its taxing authority over the seller (as defined by the US Supreme Court). Economic nexus is established when a seller exceeds the threshold number of transactions and/or dollar amount of sales in a given state. Once economic nexus is established, the state can require the vendor to collect and remit sales tax for products shipped into that state. 

Foreign State 

Any state or territory in the United States other than the Commonwealth of Virginia. 

Tangible Personal Property 

Property, other than real property, which may be seen, weighed, measured, felt, or touched, or is in any other manner perceptible to the senses. Under Virginia law, the term “tangible personal property” does not include stocks, bonds, notes, insurance, or other obligations or securities (as defined in VA Code § 58.1-602). 

VIII.  Policy  

  A.  Collection

The University monitors foreign state sales to ensure that sales tax is collected and remitted at the correct rate in any jurisdictions where the University has established economic nexus. Departments and activity heads must collect Virginia state and local sales tax on behalf of the University for the sale of all tangible personal property, except for: 

  1. Textbooks sold to University students; and  
  2. Retail sales of meals to students or others, if the price of the meals is included in room, board, or tuition and fee charges. 
  3. Any services included in the sale of tangible personal property which are not charged separately. 
  4. The fabrication of tangible personal property for consumers, who furnish, either directly or indirectly, the materials used in fabrication. 
  5. The furnishing, preparing, or serving for a fee of any tangible personal property consumed on the premises of the person furnishing, preparing, or serving such tangible personal property. 

B.  Exceptions for Collecting Virginia Sales Tax 

Except for tangible services such as restaurant meals and short-term lodging, collection of state and local sales tax is not required for sales of services. Some common examples of non-taxable services include, but are not limited to: 

  1. Professional, insurance, or personal service transactions that involve sales as inconsequential elements which are not charged separately. 
  2. Services rendered by repair persons for which a separate charge is made. 
  3. Services not involving an exchange of tangible personal property which provide access to or use of the Internet and any other related electronic communication service delivered electronically via the Internet. 
  4. The amount separately charged for labor or services rendered in installing, applying, remodeling, or repairing tangible personal property sold. 
  5. Transportation charges separately stated. 

[Note: For a complete list of Virginia exemptions, refer to Title 58.1, Chapter 6 of the Virginia Code. For information on exemptions in foreign states, contact University Controller Office.] 

C.  Reporting Sales Tax 

  1. Virginia Sales:
    The department or activity head must report and submit to University Controller any sales tax, even if there have been no sales for that month.  A copy must be retained in the department, together with the purchaser sales tax exemption certificates, if any, relating to such sales. 
  2. Foreign State Sales:
    The department or activity head must track and report any sales shipped into foreign states to University Controller. Foreign state sales must be submitted no later than the sixth day of the month following the month of the sale. University Controller will assist in identifying taxable sales in jurisdictions where the University has established economic nexus. 
  3. Late Charges:
    Any department failing to meet the monthly reporting deadline will be charged for any resulting late charges assessed to the University.
  4. The department or activity head is responsible for:  
    1. Collecting sales tax when a sale in his/her area is subject to sales tax.  
    2. Submitting to University Controller no later than the sixth day of the following month:  
      1. Monthly Virginia sales data.   
      2. Monthly foreign state sales data as required by University Controller. 

D.  Remittance of Sales Tax Receipts 

University Financial Services Controller Office aggregates University sales tax receipts and electronically remits them to the appropriate tax authorities, including the Virginia Department of Taxation with full payment. The expense is charged to the respective departmental revenue accounts to recover the tax payments made on their behalf. 

E.  Compliance with Policy 

Failure to comply with the requirements of this policy may result in disciplinary action up to and including termination or expulsion in accordance with relevant University policies.