Policies

Sales/Use Taxes, Etc.

Section: Fiscal Index: B-14

Policy

Texas Sales and Use Taxes

As a State of Texas agency, the University is exempt from the payment of state and local sales and use taxes within the State of Texas on taxable items sold, leased, or rented to, or stored, used or consumed by the University in accordance with sections 151.309 and 156.102, Texas Tax Code (References).

The University is not exempt from the collection and remission of state and local sales taxes for taxable items sold by the University. All applicable state and local sales taxes will be collected and submitted to the state for department sales to students, employees or the general public.

Texas Hotel Occupancy Taxes

The University is exempt from payment of the state portion of hotel occupancy taxes for lodging establishments in Texas but is not exempt from payment of the local portion of hotel occupancy taxes for Texas lodging establishments.

Campus Student Housing Rentals

Sales of student housing rentals by the University are not subject to collection of state or local hotel occupancy taxes. A dormitory or other housing facility owned or leased and operated by an institution of higher education and used by the institution for the purpose of providing sleeping accommodations for persons engaged in an education program or activity at the University is excluded from the definition of a hotel under Texas Tax Code 156.001 (References).

Taxes Imposed by Another State

The University is not exempt from payment of taxes imposed by another state. 

Procedure

Departments purchasing items for use by the University shall claim exemption from sales and use tax within the State of Texas using the UHV Texas Sales and Use Tax Exemption Certification on the University’s website.  See the UHV ProCard Manual for further guidance on claiming exemption from sales and use tax when using a ProCard for purchases. (References).

Departments shall calculate and collect sales taxes for all taxable items sold unless a properly completed and signed Texas Sales and Use Tax Exemption or Resale Certificate is obtained from the purchaser and a copy is attached to the deposit form. Deposit forms for taxable sales should have revenues and sales taxes itemized separately using proper taxable revenue accounts. (References)

The Finance Office can assist in providing sales tax guidance to departments. Additional guidance to determine whether a sale is subject to sales tax may be found at the following websites:

State of Texas Rules and Regulations for Sales and Use Tax
State of Texas Sales Tax Publications

If, upon review of a deposit by the Finance department, it is determined that sales taxes were not collected on a taxable sale and a properly completed and signed Texas Sales and Use Tax Exemption or Resale Certificate is not attached, Finance personnel will calculate the sales tax due and reduce the amount of departmental revenue by that amount.

Texas Hotel Occupancy Taxes

Persons traveling on official University business inside Texas shall claim exemption from the state portion of hotel occupancy tax, using a Texas Hotel Occupancy Tax Exemption Certificate. (References)

Payment of Exempt Taxes

State and local sales taxes and/or the state portion of hotel occupancy taxes on purchased goods or services for University use where the tax should have been exempt may be paid or reimbursed from University funds, except for sponsored projects and state appropriated funds, at the discretion of the cost center manager if considered administratively inefficient to obtain the exemption. 

References:

1. UH System Administrative Memorandum 03.A.12
2. State of Texas Rules and Regulations for Sales and Use Tax
3. State of Texas Sales Tax Publications
4. Texas Comptroller of Public Accounts Accounting Policy Statement 008
5. Texas Tax Code Section 151.309, Governmental Entities Tax Exemption
6. Texas Tax Code Section 156.001 (2), Dormitories and Student Housing Exemption
7. Texas Tax Code Section 156.102, Tax Exceptions for Education Organizations
8. Texas Sales and Use Tax Exemption or Resale Certificate
9. Texas Hotel Occupancy Tax Exemption Certificate
10. Texas Sales and Use Tax Exemption Certification
11. ProCard Manual

APPROVED BY:

Next Review Date:   July 11, 2022
Originator:   Finance Department