MSU Denver

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Tax Corner

City of Denver Tax Rate Change

Effective January 1, 2021, the City of Denver will increase their sales tax from 4.31% to 4.81%, for a combined tax rate of 8.81%

The following Tax Guidance serves as an informational board that interprets and explains tax issues as it relates to the University. As a public institution of higher education of the state of Colorado, generally, Metropolitan State University of Denver is exempted from most federal taxes and from all Colorado State and local government sales tax. However, activities arise within the MSU Denver community that constitutes taxable events. This can include the requirement to collect sales tax on sold or rented merchandise or withhold tax on certain vendor payments. Please click on the following tax categories to see a complete list of explanations, policies and forms. Continuous updates will be presented. For further assistance, please contact the Tax Compliance Accountant.

Tax Resource for Students

While the IRS website has many Publications and instructions, students may find these particularly helpful:

How can I find out if my country has a tax treaty for scholarship income with the United States?

A list of treaty countries can be found in IRS Publication 901. Not all treaties are the same, so we suggest that you review your country’s treaty.

What portion of my scholarship award may be considered taxable?

U.S. tax law divides scholarships received into two parts. Scholarship that is used for tuition is not taxable, but scholarship that is used for living expenses is taxable. Expenses that are considered tuition include all tuition and fees required for enrollment, books, fees, supplies, and equipment for courses of instruction. Additional amounts, such as amounts provided for room and board or for travel expenses, are taxable.

IRS Withholding Calculator

The IRS encourages everyone to use the Withholding Calculator to perform a quick “paycheck checkup.” This is even more important this year because of recent changes to the tax law for 2018.
The Calculator helps you identify your tax withholding to make sure you have the right amount of tax withheld from your paycheck at work.

International Students

Do foreign students need to file a United States Income Tax return?

You only need to file if you have income that is subject to tax, such as wages, tips, scholarships that exceed tuition and required fees, dividends, etc. The tax return you must file is Form 1040NR, the Federal Tax Return for Nonresidents. If you have any earned income, your tax return is due by April 15; otherwise the filing deadline is June 15. If you owe more tax than was withheld, you must pay it by the appropriate date. If more tax than you owe has been withheld, you should file a return to claim a refund for the excess amount that was withheld.

Unrelated Business Income Tax (UBIT)

Even though an organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. For most organizations, unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization’s exemption.

Why is it Important to MSU Denver?

If we incur unrelated business taxable income, we need to make quarterly estimated tax payments on that income during the fiscal year.

If you are unsure if the activity is subject to UBIT, please complete the UBIT Questionnaire:

Sales Tax

What is Sales Tax?

Sales tax is a tax charged when a buyer purchases or rents tangible personal property or certain taxable services.  Sales tax is imposed upon the sale price which applies to both profitable and unprofitable transactions. For auction items, sales tax is charged on the lesser of the sales price or the fair market value.

  • Tangible personal property is everything other than real estate that can be touched or moved.  Examples include computers, furniture, food, beverages, publications, t-shirts, books, pens, etc.
  • Taxable services include informational and entertainment services, catering services, lodging services, telecommunication services and energy producing services and delivery charges.

Sales Tax: Frequently Asked Questions

Policies

Withholding Tax