Systems and Procedures
A Division of The Office of Budget and Finance
A Division of The Office of Budget and Finance
In accordance with Policy FN33 Sales and Use Taxes, all Business Areas of the University permitted to engaged in activities that generate retail sales must collect and remit Pennsylvania sales or use taxes. The selling unit is required to determine whether the transaction is subject to Pennsylvania Sales or Use tax; if so, collect tax by:
When a business area completes a taxable sale, the business area is required to collect the appropriate amount of sales tax from the customer at the time of purchase. The taxable amount needs to be displayed on the receipt as a separate line item.
Business Areas transacting retail sales must train the employees on sales taxable transactions. The employee needs to understand which items are taxable and how to handle tax-exempt sales.
Point-of-Sale (POS) systems are hardware and software that enables a business to record sales at the point of sale (i.e., check-out counter, online, etc.). When acquiring a POS system, be sure to choose a system that is capable of handling state sales tax calculations and reporting. Ensure that the system is up to date with the latest tax rates and regulations.
Configure the POS system to accurately calculate sales tax based on the location of the sale. Typically, the business area's physical address and relevant tax rates will need to be entered into the software.
Within the POS system, designate which products or services are taxable and which are tax-exempt (if applicable). Ensure that the system can differentiate between these items. Customer transactions occur within the POS system and the system automatically calculates the correct sales tax amount based on the products sold and the location of the sale.
Use the POS system to generate sales reports, including details on the sales tax collected for a specific period (i.e., daily, weekly, or monthly). The business area is required to maintain detailed records of all sales transactions, including receipts, invoices, and sales reports generated by the POS system. This documentation will be essential for reporting, remittance, and auditing purposes.
Periodically, the business area should verify that the tax amounts calculated by the POS system are accurate. Tax Services, a division of the Office of Budget and Finance, will notify business areas when changes in tax rates are announced.
All collected sales taxes are to be recorded to General Ledger Account 26003500 State Sales Tax. The amount of collected sales tax needs to be a separate line item when recording the Cash Deposit Journal Entry. See the SIMBA: Journal Entry for Cash Deposits article for details on completing the Cash Deposit Journal Entry.
Accounting Operations, a unit within the Controller's Office, remits collected sales taxes electronically, by the 20th of the month as required by the Commonwealth of Pennsylvania. Business Areas should not remit their own payments. When remitting the payment, GL 26003500 State Sales Tax is utilized, and the account should be cleared.
After the 20th of the month, business areas are to review GL 26003500 to ensure all tax payments are remitted. Any discrepancies need to be addressed before the month closes. Any outstanding issues need to be reported to Accounting Operations.
Tax Services, a division of the Office of Budget and Finance, is responsible for submitting Unrelated Business Income Tax (UBIT) returns.
In accordance with Policy AD35 University Archives and Records Management, the following are the retention requirements:
The Financial Officer is responsible for ensuring that procedures pertaining to the accountability and safeguarding of all cash receipts, cash funds, and other assets are established and followed in accordance with approved University policies and procedures. Regular audits relating to advances, cash, travel, equipment accountability, and other expenditures provide a means to protect University assets. The Financial Officer is responsible for working with Internal Auditing when audits are being performed in the administrative area. Audits pertaining to sponsored activities or other audits performed by external auditors may also be performed. The Financial Officer is also responsible for working with the external auditor and/or a central University office related to these procedures.
University Records retention must be managed in accordance with Policy AD35 University Archives and Records Management, and the University's Records Retention Schedules that have been approved by the Records Management Advisory Committee (RMAC), the Office of General Counsel, and Senior Vice President and Chief of Staff. These Records Retention Schedules are derived from - or based upon - federal, state, and local statutes or regulations (i.e., Federal Acquisition Regulations, the OMB Uniform Guidance, Internal Revenue Service, and other regulations governing the auditability and retention of financial records), University Policy, industry standards, and business needs. All University Records must be maintained in such a manner to provide ease of access, establish a suitable audit trail for all transactions, and to be reviewed prior to disposition.
University Records and Transitory/Disposable Records are defined below. See Policy AD35, Definition of Terms for additional information.
Upon completion of the retention period, University Records must be disposed of via secure destruction or transfer to University Archives, unless an exception to the disposition process set forth below applies. In many cases, retention periods and disposition methods may be generally determined by comparing the type of record (i.e., reports, correspondence, etc.) to similar records series with known retention periods listed on the Records Retention Schedule. If the disposition method for University Records states "Review by Archives" on the Records Retention Schedule, the Unit responsible for those records should consult the University Archivist for a final determination of disposition. For University Records that must be securely destroyed, units may arrange for shredding services by either contacting the Blue/White Shredding Program or the Inactive Records Center (IRC).
Exceptions to the disposition process are as follows:
To safeguard the privacy of individuals, records that contain Personally Identifiable Information (PII), as defined in University Policy AD53 Privacy Policy, or student records, as defined in University Policy AD11 Confidentiality of Student Records, must be destroyed beyond recovery. For additional information regarding privacy and the protection of an individual's personal information, see Policy AD53 Privacy Policy.
Additional questions should be directed to the Office of Records Management Program.
There are no exhibits associated with this document.
For questions or additional detail, please contact Tax Services.
To request changes to this procedures, please contact the Office of Systems & Procedures by submitting a GURU Technical Support Request form.
November 1, 2023