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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.
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.
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.
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.
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.
A sale is the exchange of a good or service for something of value. A sale occurs when a buyer first takes title or possession of an item or when a taxable service is performed.
A gift is the transfer of money or goods without compensation. They do not constitute a sale and should be deposited with the Foundation. See MSU Denver Foundation’s Gift Acceptance Policy for further explanation.
A sale is not a gift and should be deposited with the University.
**See Determination of Proper Classification of Revenue as Sales or Charitable Gifts for further clarification.**
Refundable deposits are funds placed in trust in exchange for use of a good. This does not constitute a sale.
A fundraiser is a process of gathering voluntary contributions of money or other resources for a particular purpose.
Many times, the process of fundraising, can create a taxable event. This takes place anytime a personal tangible property is sold to a buyer. Some examples are a bake sale, selling art work or having a banquet with a registration fee.
When this happens, sales tax should be collected from the buyer at the time of purchase.
A required donation sale is a taxable event. Sales tax is to be reported on the deposit transmittal form.
A Sales Record Form should be completed for each sales event. By entering the sales price and quantity sold, the spreadsheet will calculate the proper taxes. Otherwise, to calculate sales tax on a sale item:
A Deposit Transmittal Form needs to be completed for each deposit. Use your departmental FOAP for sales and the appropriate Locn code as marked on the Transmittal Form:
Separate the collection of sales tax between city and state into the appropriate tax liability accounts as follows:
Note: Program codes are not required for tax deposits.
**Submit Sales Record Form, Deposit Transmittal, Payment, and any other supporting documentation to Accounting Services, SSB320**
Please note that sales tax rates may be subject to change semi-annually, each January and July. The following tax rates need to be combined:
MSU Denver is tax exempt, because we are a government agency. We are not a 501©(3) Charitable Organization
MSU Denver is exempt from paying sales tax on purchases for the institution ? if purchased and paid for directly by the institution, i.e. MSU Denver check or university?issued credit card. You may NOT claim sales tax exemption if you personally pay for your purchase by any method.
Sales tax is imposed on the purchase price of retail sales, leases, or rentals of tangible personal property and certain taxable services that are purchases or performed in Denver or are delivered to, stored, or used in Denver.
We are tax exempt from paying sales tax. We are NOT tax exempt from collecting sales tax. By state law, we must collect sales tax at the time of sale.
The sales tax you collect belongs to the state and/or the city. For this reason, we have set up liability accounts where the tax portion will be deposited. The Sales Record form on our website automatically calculates the sales tax for you and your deposit is automatically divided up into the proper accounts. You must complete and submit a deposit transmittal form, Sales Record Form and deposit of your funds to Accounting Services SSB 320.
Current Sales Tax Rates on located below.
Almost everything you sell or rent out will require the collection of sales tax. Make sure to have the appropriate Sales Record Form. Sales records are also required for non?taxable sales. If reportable sales tax is not collected for remittance to the taxing authorities, your department will accrue penalties and interest which may exceed the original sales tax amount.
Yes. Sales tax is imposed on all retail tangible personal products.
Yes. Organizations which make retail sales of tangible personal property for fundraising purposes are required to collect sales tax. Den topic # 36. Tax should be collected on the lesser of the sales price or the fair market value.
Yes. If the wholesaler has nexus. The university does not have a resale certification. In addition, sales tax is to be collected from each individual sale.
Yes. Rental of tangible personal property is subject to sales tax.
No. Faxing services are exempted from sales tax.
Catering services remain tax exempted as long as the event is in accordance to our exempt purpose and we are NOT charging a registration fee, ticket or any other involuntary contribution. Otherwise, sales tax is to be paid at a rate of 4% to the City and County of Denver or use tax if not separately stated on invoice.
Gift/awards remain tax exempted as long as the event is in accordance to our exempt purpose and we are NOT charging a registration fee, ticket or any other involuntary contribution. Otherwise, sales tax is to be paid at a rate of 3.65% to the City and County of Denver or use tax if not separately stated on invoice.
No. This is a nontaxable service.
No. The University is exempted from sales tax when used within our exempted purposes.
No, they are not taxable. However, MSU Denver is not licensed to conduct raffles. It is strongly prohibited.
No. Since the travel is paid directly by the University, and the students are not paying and then being reimbursed, these purchases are tax exempt.
Yes. Information services include the furnishing of information of any kind, which has been collected, compiled, or analyzed by the seller and which is made available through electromagnetic waves. The tax is imposed on the purchase price or charge for access, use, or receipt of such information or the rights to access, use, or receive such information. The result is that such information is taxable whether it is accessed, used, or received electronically or in hard copy, such as in books, publications, or reports. Information services do not include producing custom research for a specific client that creates information that was previously not in existence.
No. The University is not approved to hold raffles.
No. Sales tax is required to be separately stated.
Yes – the Kentucky Sales Tax Exemption is on our webpage.
No – the state of Georgia does not allow colleges/universities outside their own state to be exempt from sales and use tax on their purchases. OCGA 48-8-3(9): 48-8-30.
Yes. The University does not have a resale certification. Sales tax needs to be paid at the time of purchase and then at the time of sale. If you do not pay sales tax at the time of purchase, it is subject to use tax.
Yes. As long as MSU Denver is paying for the lodging with the school’s funds directly, the transaction would not be subject to Lodger’s tax since the speaker is not reimbursing the school and is not paying for it first and then reimbursing the school.
Yes. Items shipped in the state of Colorado will require state sales tax collection. Items shipped in Denver, to Northglenn, Greenwood Village or Aurora will require the appropriate city, county and state tax.
No. Unless shipping to the state of Washington and Indiana. Contact the Tax Accountant for the current sales tax rates in these areas.
Yes. Sales tax is imposed on the purchase price of retail sales, leases, or rentals of tangible personal property in Denver or are delivered to, stored, or used in Denver.
If the buyer hires the carrier to pick up in Denver, the carrier is acting as their agent, thus the transaction occurs in Denver and sales tax should be collected.
Nexus is having a sufficient physical presence in a taxing jurisdiction that will determine whether an out-of-state business selling products is liable for collecting local tax.
Yes. Denver’s ordinance provides an exemption from the sales tax on sales to religious or charitable corporations when purchased for their regular religious or charitable functions or activities (Article II, Section 53-26 (2)). Exemptions issued by either the IRS or State of Colorado will not automatically qualify the organization for exemption from City of Denver taxes. For a charitable non-profit corporation to qualify for a Denver exemption, it must meet the specific criteria and be issued a Denver Sales Tax Exemption Letter.
Use tax is imposed upon the privilege of using, storing, distributing, or consuming within the City, tangible personal property and certain services purchased at retail, when there has been no previous payment of a legally imposed sales or use tax. Notification of use tax obligations would need to be forwarded to the Tax Accountant.
Yes. State and city sales tax is to be remitted for the price of each bottle served with an open bar at an event with a registration fee. If a cash bar is served, sales tax may be imputed on the per glass price with the appropriate tax submitted to the state and city.
Tickets sold in Denver that provide “entrance only” to an event are not taxable unless to a specific Denver owned or leased facility. Some of these facilities include the Coliseum, Botanic Gardens, Performing Arts Complex, Boettcher Concert Hall, CO Convention Center, and Red Rocks Amphitheater.
Last updated July 2015
The purpose of this policy is to define guidelines and to ensure that MSU Denver complies with sales tax regulations for the State of Colorado, City and County of Denver, and Special Districts as well as areas of nexus.
It is the policy of the University to ensure we remain compliant with all applicable tax laws and regulations.
This document should be read in conjunction with the policy dated April 30, 2015 entitled Determination of Proper Classification of Revenue as Sales or Charitable Gifts. MSU Denver Foundation is a separate legal entity and may be subject to different sales tax regulations. Please contact the Foundation at 303-556-5220 for further clarification.
1. When to Collect Sales Tax:
The following list provides assistance in determining whether or not a sale is subject to sales tax:
Sales of most services are not taxable. However, if a sale involves both goods and services – such as a service call that involves charges for both parts and labor – the parts (tangible property) are taxable but the labor (service) is not. The sale should separately state the labor from individual parts. Failure to do so can cause the entire amount of the sale to be taxable.
The University’s Revenue Policy should be followed when implementing new departmental revenue streams.
2. When to Pay Sales Tax:
Using personal funds and expecting a reimbursement will require the buyer to pay the appropriate sales tax. The University’s sales tax exemption may not be used in conjunction with personal funds. The University will not reimburse paid sales tax. Reimbursing the University for personal items or accidental personal purchases is strictly prohibited. Requests for refunds from vendors are required.
The amount of sales tax charged depends upon the following factors:
Items frequently sold on the Auraria campus and which sales tax rate to apply. Click the title link to download the Product and Tax Rate table.
Note: This is not an all-inclusive list of items to be taxed. It is a descriptive sample. Contact the Tax Account (6-6879) or [email protected] if you have any questions about whether or not a sale is taxable.
3.2. Date of Sale and Tax Rate
The current sales tax rates are available on the Office of the Controller, Accounting Services website. Sales Tax rates are subject to change during both January and July of each year.
3.3. Location of Sale and Tax Rate
The sales tax rate charged depends upon where the customer takes possession of the goods or point of delivery, if shipped. Please see Point of Delivery Sales Tax Rate for further information.
4.1. Catering Services
Catering service is a taxable service in the State of Colorado and the City and County of Denver. Therefore, when a registration fee is required for admittance into an event, MSU Denver’s sales tax exemption becomes null and void. State and city sales tax must be paid on catering, food, beverages, lodging, equipment rentals or any other taxable items used for the event.
4.2. Non-Taxable Food Sales
Certain types of food sales are not taxable. These include:
5.1. Displaying the Sales Tax License
MSU Denver, Aurora, Greenwood Village and Northglenn each have their own State of Colorado Sales Tax License and City Sales Tax License. Sales Tax licenses are required to be posted in a conspicuous place.
The Accounting Services office obtains and renews all Sales tax licenses. Individual departments are prohibited from getting their own or renewing existing licenses. If you believe additional licenses are necessary contact the Compliance Officer (6-6879).
5.2. Remitting Sales Tax
Accounting Services and the Foundation staff are responsible for their respective remittance of the Sales Tax return. Individual departments must not submit their own.
5.3. Charging Sales Tax
Sales tax should be charged as a separate line item at the time of the sale. This is the preferred practice at MSU Denver. Alternately, a conspicuous sign should be displayed that shows the price of each item and separately states the amount of tax for each item offered for sale. In a limited number of circumstances, it may be permissible to impute sales tax after the fact. Work with the Tax accountant to determine the most appropriate method for your operation.
5.4. Recording Sales Tax
Sale tax collected should be deposited in the University tax liability accounts by the last day of the month in which the sale took place. The appropriate FOAPALs are used to record the liability:
890025-your ORG-2901: State of Colorado,
890025-your ORG-2902: Denver
890025-your ORG-2903: Northglenn
890025-your ORG-2904: Greenwood Village
890025-your ORG-2905: Aurora
DO NOT DEPOSIT SALES TAX INTO YOUR DEPARTMENTAL FOAPAL!
A copy of each Sales Record Report on which sales tax was collected must be submitted to Accounting Services with the deposit transmittal for audit support. If a buyer is claiming sales tax exemption, then a copy of the sales tax exemption/letter must be submitted with the deposit transmittal to Accounting Services. Funds classified as charitable transactions are not to be deposited through Accounting Services. These proceeds are to be deposited with the University Advancement Services Office for the Foundation.
Determination of Proper Classification of Revenue as Sales or Charitable Gifts
The purpose of this summary is to clarify and simplify the classification of revenue and to ensure consistent and proper treatment of charitable and non-charitable transactions. The correct classification and processing of sales and charitable transactions is essential for accurate financial reporting by Metropolitan State University and its Foundation.
Charitable transactions and sales should be analyzed for proper classification. Revenue generating activities that do not constitute a donation or gift, but rather a sale, should be deposited with the University in the appropriate departmental fund. Revenue that is generated using state owned facilities, equipment and/or resources are considered state funds and not a gift or donation, thus, such funds are to be deposited with the University in the appropriate departmental fund.
Charitable transactions such as donations given to support the University’s mission should be deposited with the Foundation. Proceeds from the sale of gifts-in-kind to the Foundation will be deposited with the Foundation unless those items previously were transferred to the University. Income from auctioned events, to further the mission of the University, is to be deposited with the Foundation. All gifts received through student clubs may remain with the University. All other gifts should be deposited with the Foundation unless otherwise designated by the Foundation.
Funds received by the Foundation that do not relate to the mission of the organization can jeopardize the Foundations’ tax exempt status. Guidelines for donations are provided in the Foundation’s Gift Acceptance Policy.
A Form W-9 is used to request the taxpayer identification number (TIN) of a U.S. person (including a resident alien) and to request certain certifications and claims for exemption. This form is also used to substantiate US status. Formal entities will supply an employer identification number (EIN). For federal purposes, a U.S. person includes but is not limited to:
Form W-9 is used to obtain the payee’s correct name and TIN. For individuals, the TIN is generally a social security number (SSN).
A flat 28% withholding tax is required in the following situations:
Form 1099-MISC, Miscellaneous Income – this form is filed on a calendar year basis to the IRS and to the payee of proceeds in excess of $ 600. This includes payments for rents, attorneys, independent services, prizes, awards and any amount withheld as backup withholding tax. The annual due date is January 31.
The Internal Revenue Service (IRS) requires that when services are provided inside the U.S, taxes must be withheld from payments made to foreign vendors unless the income is exempt under the guide of a tax treaty between the foreign vendor’s country and the U.S. The appropriate IRS form must be completed and verified as valid.
A Form W-8 or 8233 are used to obtain a taxpayer identification number and to request certain tax treaty claims for exemptions. These forms are also used to certify foreign status. The following lists are the various forms mentioned:
Form 1042S – this form is filed for each U.S sourced payment paid to a foreign person. It is based on a calendar year and filed to the IRS and the foreign person by March 15 annually.