CA 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 & Accounts Payable will pay (accrue) Los Angeles sales tax (or accrue the tax rate for the applicable California County).

Use Tax on Procurement Cards

For P-Card purchases made with non-California merchants that were not charged California use tax at point-of-sale, a representative from Disbursement Control & Accounts Payable may contact the applicable P-Cardholder for invoice/receipt information and pay (accrue) Los Angeles use tax when required.

If Disbursement Control & Accounts Payable does not receive a response to such an inquiry, use tax will be accrued. Use Tax accruals cannot be reversed after 60 days. Therefore, it is important for departments to carefully and frequently review Procurement Card sales tax accruals on their ASRs and notify Disbursement Control and Accounts Payable within the 60 day period of any incorrect accruals.

Use tax will be paid using the Procurement Cardholder's corresponding USC account when the transaction meets all of the following criteria:
The transaction was $500 or more, including tax and delivery	CA use tax was not charged
The transaction was taxable	A non-CA merchant was used
Use Tax is paid via a journal entry (XX-025P)

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.