Systems and Procedures
A Division of The Office of Budget and Finance
A Division of The Office of Budget and Finance
The Canadian government levies a Goods and Services tax (GST) on most goods and services sold in Canada by producers having over $30,000 in annual sales. The University Press, in compliance with the law, identifies, collects, and remits this tax. Because the tax is on sales, not collections, a Cash Deposit Journal Entry (except for prepaid subscriptions) will not suffice to report/remit this tax.
The University Press (Press) will invoice the respective buyers for all books sold by the Press to Canadian addresses. The Press utilizes a computerized accounts receivable system. As payments are collected and deposited, the Cash Deposit Journal Entry will debit the University designated bank depository and credit all income to the University Press GL Account 47000207, Cost Center 417231000, Business Area 4170, and Fund 1110000008 Penn State Press Print Subscriptions.
At the end of each calendar quarter, the Press will report via memo to Accounting Operations the amount of book sales to Canadian addresses (including postage). Accounting Operations will record the current GST rate on gross sales to the ledger account, "Other Deposits Held for Others." The computation for the current tax due is gross sales X current GST rate. The Journal Voucher entry would be:
See Remitting the Goods and Services Tax below for complete instructions on remitting the tax.
There are two prime agencies who manage many University Presses’ journal sales to Canada (including Penn State's). They are John’s Hopkins Press and EBSCO. There are other agencies who also manage subscriptions in much the same way.
Journal sales are prepaid, and the subscribers are billed (including the GST) by the agency. The agency remits GST taxes to the Canadian government and the remaining proceeds to the Press (less subscription discounts). The Press' summary reports must identify these "agency" sales. By identifying these agency sales this prevents duplicate GST reporting.
When the agency remits payments to the Press, a Cash Deposit Journal Entry is prepared debiting the University designated bank depository GL and crediting GL 47000207, Cost Center 417231000, Business Area 4170, and Fund 1110000008 Penn State Press Print Subscriptions.
Quarterly, Accounting Operations completes the Canada Revenue Agency’s “GST/HST Return for Registrants” to report and remit the amount due for Press sales into Canada. The Non-PO Invoice remitting these taxes will charge GL 26004300, business area 5210 and Fund 1100000001 for the amount of the Canadian Goods and Service Tax accumulated in the account. This is payable in Canadian dollars.
The GST quarterly reporting form provides for reversing (adjusting) the taxes due for returned merchandise and bad debts (after valid, documented attempts to collect the bad debts). These adjustments must also be reported by the Press via memo to Accounting Operations for appropriate inclusion in quarterly reporting and Journal entries.
See Procedure FN2002 Processing Returned Checks for complete details on this business process.
Violation of a financial policy and/or procedures should be reported to your supervisor, your Human Resources representative, unit manager, and/or office responsible for the policy and/or procedure. Where those resources are inadequate, you may choose to make an anonymous report through the Penn State University hotline by calling 1-800-560-1637.
Business Areas or units that do not follow the guidelines set forth in this procedure will, at a minimum, be held responsible for any fines, penalties, or losses.
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 collaborating 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 be responsible for collaborating 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 retention schedules approved by the Records Management Advisory Committee, 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, 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 Record 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. If the disposition method for University Records states "Review by Archives" on the records retention schedule, the employees 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.
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 may be directed to the Office of Records Management.
There are no exhibits associated with this procedure.
For questions or additional details, please contact the Director, University Press.
To request changes to this procedure, please contact the Office of Systems & Procedures by submitting a GURU Technical Support Request form.
April 18, 2024