Texas A&M University is exempt from paying State of Texas sales tax on purchases. However, it is not exempt from collecting tax on sales made by the University.
When a university department sells a taxable item, it is responsible for collecting the sales tax, unless proof of tax exemption is obtained. Sales tax exemption certificates should be kept on file by the selling department following the retention schedule. The department must collect the tax and deposit it through iPayments. iPayments is configured to charge sales tax on all taxable items and send the funds to account 034998-2110. If the purchaser is sales tax exempt, select the tax exempt option to remove the sales tax. Be sure to add in comments that a sales tax exemption certificate is on file.
There is no such thing as a pass-through sale. We cannot pass on the University's exempt sales tax status to anyone else. For example, a university department cannot purchase shirts and then sell them to non-tax exempt persons without collecting the sales tax.
Financial Management Operations remits the sales tax collected by the entire university to the State Comptroller's Office as required. There is no need for the department to fill out a sales tax form or to remit the tax to the state. The tax rates vary from county to county and sellers should use the appropriate tax rate for their location. The current tax rate for Brazos County is 8.25%.
Below is a list of common taxable and nontaxable items sold by university departments.
Taxable
- A tax must be collected on all cash sales involving tangible, personal property. The State Comptroller defines this as personal property that can be seen, weighed, measured, felt or touched, or that is perceptible to the senses. See Texas Tax Code Section 151.009.
- Clothing
- Computer programs
- Meals
- Books
- Equipment rental
- A tax must be collected on all taxable services. Please see Texas Administrative Code Title 34, Part 1, Chapter 3, Subchapter O, Rule §3.298, Rule §3.310, and Rule §3.330 for more information. (See the Texas Administrative Code on State and Local Sales and Use Taxes for a complete list of rules.)
Some examples of taxable services include:
- Amusement services
- Data processing
- Information services
- Internet access
- Motor vehicle parking and storage
- Laundry services
- Telecommunication services
- Utility services
Nontaxable
No tax is required for many items, such as:
- Room rental
- Conference registration
- Booth rental
- Dues
- Fines and penalties
- Subscriptions of six months or longer which are mailed second-class