With limited exceptions, Washington University is required to collect sales tax on retail sales that are not part of the university’s exempt purposes of education and research. In addition, sales of tangible personal property completed within the State of Missouri and leasing of certain types of entertainment facilities on any of the university’s campuses require the collection of sales tax on the items sold if determined to be not related to the university’s exempt purpose.
There is no requirement to collect sales tax on sales completed outside of the State of Missouri except that any sale made to an Indiana individual (resident), company or organization is subject to use tax that the university as seller must collect from the Indiana buyer. Contact the Tax Department about information on the type of sale and the applicable use tax rate.
Guidelines
- Sales of prescription drugs and prescription devices are generally exempt from sales tax.
- Sales of services are generally not subject to Missouri sales tax. Of the types of services that are relevant to the university, only services related to the furnishing of rooms, meals, and drinks by a hotel, restaurant, or other place that regularly provides such services are subject to Missouri sales tax.
- When a sale involves both merchandise and a nontaxable service, the sale of the merchandise is subject to tax, and the service is not subject to tax if the sale of each is separately stated. When the sale of merchandise and a nontaxable service are not separate, the entire sales price is taxable if the “true objective” of the transaction is the sale of the merchandise. None of the sales price is taxable if the “true objective” of the transaction is the sale of the nontaxable service.
- Sales to tax-exempt organizations do not require collection of sales tax if the university obtains a valid state sales/use tax exemption certificate from the exempt organization.
- Sales of donated items are not subject to sales tax.
- In general, the same rules apply whether sales are conducted through a university facility or via the university’s website. A sale is deemed completed in the State of Missouri if after payment the item is delivered to a Missouri address.
Examples
- Student Union group is purchasing logo T-shirts for their group and then collecting the cost of the shirt from each member of the group. The shirts were purchased using the university’s sales tax exemption. This is not a taxable sale, but an internal reimbursement within the group for the cost of the shirts. Any sales outside of the group would be taxable.
- Olin School of Business sells logo items via the internet. The sales are made to residents and nonresidents of the State of Missouri. Sales to Missouri residents are subject to sales tax, sales to residents of Indiana are subject to use tax and sales to residents of other states are not subject to sales taxes.
- Physician’s office is selling non-prescription items to patients to save them a trip to another facility. The sale of the non-prescription items are subject to the collection of sales taxes whether or not the physician’s office paid sales or use tax on the purchase of the items. Sales of prescription items would be exempt from collection of sales tax under Missouri regulations.
- A university department is producing and selling an enzyme to other organizations. Sales of these enzymes to Missouri residents are subject to sales tax collection (unless the buyer is exempt and provides a tax exemption certificate). Sales of the enzymes to Indiana residents are subject to the collection of use tax and sales to residents of other states are not subject to sales/use tax.