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California Sales and Use Tax Information

The university is not sales tax exempt.

The State Board of Equalization requires USC to pay California sales and use tax on all taxable transactions (i.e. tangible, non-edible items) that were purchased in or delivered to California.

Sales Tax is the term used when a purchase was made in the State of California
Use Tax is the term used when the purchase was made outside of California, but delivered for use in California
List of Common Tax Exempt and Taxable Transactions

For taxable purchases that were made with non-California merchants that did not charge sales tax, Disbursement Control and Accounts Payable will pay (accrue) Los Angeles sales tax (or accrue the tax rate for the applicable California County).

Use Tax on Procurement Cards

Effective with the November 15, 2011, P-Card eStatements, Accounts Payable will review receipts associated with P-Card transactions made with non-California merchants to ensure that sales/use tax was properly accrued at point-of-sale. If it is deemed that sales/use tax was not paid, Accounts Payable will accrue the correct tax and charge it to the university account associated with the transaction. Department are responsible for carefully and frequently revieiwng Procurement Card sales tax accruals on their ASRs and immediately notifying Accounts Payable of any incorrect accruals (pcardtax@usc.edu).

As of January 3, 2012, Accounts Payable will automatic accrue sales/use tax on unreconciled and undocumented transactions (i.e., no receipts attached to the eStatement transaction), after 35 days. Therefore, it is imperative that cardholders reconcile their P-Card eStatements within 21 days after eStatements are uploaded to Kuali Financial System (KFS), as per current P-Card policy.

Sales Tax on Invoices associated with Purchase Orders

Accounts Pyable will automautomatically accrue Los Angeles County use tax on invoices for items shipped to California by non-California suppliers if use tax was applicable but not invoiced. An explanation to the non-California supplier will be provided when needed.

Note About Los Angeles Sales Tax

Los Angeles use tax is accrued, even if goods were delivered to Orange County, Sacramento, etc. However, if the vendor's initial invoice included a non-Los Angeles sales tax amount for a non-Los Angeles delivery, then the non-Los Angeles sales tax would be considered correct and would not be adjusted by Disbursement Control & Accounts Payable.