Not-for-resale purchases used in Washington State are subject to either sales or use tax. Use tax is a tax on the use of goods or certain services when sales tax has not been paid.
There are many complex rules surrounding what is and is not subject to sales and use taxes. The following information gives a few basic guidelines. The Office of Finance is happy to provide more detailed assistance if your question is not answered here.
The University of Puget Sound is a non-profit tax-exempt organization for federal tax purposes only.
The university is not exempt from sales or use tax due on not-for-resale purchases used in Washington State.
If sales tax is not listed on an invoice, the Washington State Department of Revenue instructs us to do the following. If you are comfortable contacting your vendor, please do so – otherwise, email email@example.com.
Invoices from in-state vendors:
- Do not add the sales tax onto the bill yourself.
- Contact the vendor and ask why sales tax was not charged.
- Ask the vendor to issue a new invoice that itemizes the amount of sales tax due.
Invoices from out-of-state vendors:
- If you know the out-of-state vendor has an in-state business presence, contact the vendor and ask why sales tax was not charged. Depending on the response, you may want to request a new invoice that itemizes sales tax.
- If the vendor has no business presence in Washington, it is not required to charge sales tax to their Washington customers.
If sales tax is not itemized on the invoice at Washington’s tax rate, the university is legally obligated to self-assess and remit use tax to the State.
PLEASE WRITE “USE TAX” ON YOUR INVOICE OR RECEIPT FOR REIMBURSEMENT IF SALES TAX SHOULD HAVE BEEN CHARGED BUT WASN’T AND YOU WERE NOT ABLE TO GET AN ADJUSTED INVOICE.
Common Purchases Subject to Tax
- Tangible goods not for resale (shipping is a hint)
- Equipment rentals
- Maintenance contracts
- Subscriptions (printed periodicals excluding newspapers)
Typical Purchases Missing Sales Tax
- Goods purchased in another state and used in WA
- Online purchases (e.g. Amazon)
- Downloaded music and movies
- Computer service contracts