Sales & Use Tax
Application of Retail Sales and Use Tax for Catered and Meal Purchases by State & Local Government Entities
Effective April 22, 2016, the Department of Taxation updated its policy on how the Retail Sales and Use Tax applies to catering and meal services purchased by state and local government entities. This policy allows purchases of tax-exempt food, catering, and related services under certain conditions.
Key Criteria for Tax Exemption
- The purchase must support the university's mission or function.
- The purchase must be billed directly to and paid for by the university, not by individual accounts or cash.
- The university must determine who consumes the food, when, and how it is served.
Impacts on University Activities
- Catered Events: Events that align with the university's mission, such as banquets or team meals, are tax-exempt if the university pays for them.
- Travel Meals: Individual meals purchased while on travel are not tax-exempt unless directly billed to the university or paid using the Small Purchase Charge Card (SPCC).
- Business Meals: Business meals related to the university's mission are tax-exempt if paid via SPCC or direct billing. Meals paid by personal credit cards are not eligible for tax exemption but may be reimbursed.
- Prepared Meals from Grocery Stores: If purchased for university use and billed to the university, these meals are tax-exempt.
Special Groups
Conference Services
Clients hosting catered events at the university must meet the definition of state and local government entities to qualify for tax exemptions; otherwise, the catered events offered through Conference Services are subject to taxation.
Student Organizations
Purchases made by student organizations are not tax-exempt under the university's tax exemption and require separate exemption certificates.
For tax-exempt purchases, departments are advised to use the SPCC or direct billing and provide the vendors with the Virginia Sales and Use Tax Exemption Certificate (Form ST-12). The form is available through the Accounts Payable Office. Meals paid for by personal credit cards may not be reimbursable in non-travel circumstances.
For more information, contact the Tax Office or refer to Virginia's Tax Bulletin 16-3.
Out-of-State Sales Tax Exemption
States With No Sales and Use TaxesThe following states do not impose sales and use taxes (other taxes may apply, or localities may impose local taxes).
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
States Where W&M Qualifies for an ExemptionW&M qualifies for sales and use tax exemptions if paid for directly by W&M (i.e., a W&M check, a W&M small purchase charge card, a purchase order, etc.). Employees will not be exempt if they pay from their personal funds and request reimbursement. Please click on the appropriate link to obtain the exemption certificate. Please contact the Tax Compliance Office via [[tax]] for questions.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
States that Do Not Offer/W&M Does Not Qualify for an ExemptionThe following states do not allow, or W&M does not qualify, for sales and use tax exemptions as an out-of-state educational institution or because W&M is not a 501(c)(3) organization authorized by the Internal Revenue Service.
NOTE: The Virginia Institute of Marine Science ONLY qualifies for an exemption in the Commonwealth of Virginia. |
Common Questions
Virginia Sales and Use Tax Certificate of Exemption (Form ST-12)As a public institution of the Commonwealth of Virginia, W&M and VIMS qualify for the Virginia retail sales and use tax exemption on purchases of tangible property for use or consumption by W&M or VIMS. This exemption only applies if W&M or VIMS pays the vendor directly. Employees using personal funds will not qualify for the exemption. |
Is William & Mary exempt from paying sales tax on its purchases? What purchases are subject to sales tax?The William & Mary (W&M) and the Virginia Institute of Marine Science (VIMS), as public institutions of the Commonwealth of Virginia, qualify for the Virginia retail sales and use tax exemption on purchases of tangible personal property for the use or consumption by W&M and VIMS (with certain exceptions). Therefore, all purchases made on behalf of W&M or VIMS must be made using a Commonwealth of Virginia Sales and Use Tax Certificate of Exemption (Form ST-12), regardless of the method of payment or institutional funds used. It is the responsibility of the individual initiating the purchase to alert the vendor to our tax-exempt status at the time of purchase; otherwise, sales tax may be charged, and the vendor is not required to provide a refund after the sale has occurred. |
How does ‘use tax’ differ from ‘sales tax?’Use tax is similar to sales tax in that it is a tax collected on sales made to Virginia customers. However, it is differentiated from sales tax in that for sales tax; the primary consideration is whether the sale occurred in the state, while for use tax, it is whether the property purchased out-of-state is brought into the state for use, storage, or consumption. |
What is the use tax rate?The Williamsburg, Virginia sales tax rate is 7%. Tax rates may differentiate between counties. |
What is the sales tax rate that the university charges to its customers?For sales by the university, the tax collected depends on where the buyer resides. Tax is applied based on the consumer’s address. |
Should the university collect sales tax when making sales to another university department?No, the university should not collect any taxes when selling to another department. |
Should the university collect sales tax when making sales to outside customers?Yes, if the sale is taxable under Virginia Statute. If the customer claims the sale is exempt, the department should collect an exemption certificate from the customer. |
What are the most common taxable sales made by the university to outside customers (including students)?
|
When making a sale, do we collect tax for the state that we are located in (VA) or the state where the customer is located?The tax should be collected for the state where the property is delivered to your customer. The tax applies to the delivery state if the item is shipped to the customer. You should collect the tax only if you are registered to collect tax in that state. Tax should be collected for your state if the customer picks up the item at your location. |
Use tax was charged incorrectly to my account. How can I correct this error?The procedure for correcting use tax errors depends on how the tax was paid or should have been paid at the time of purchase. Errors in use tax can arise concerning a P-Card Purchase or Purchase Order. You will work with the Procurement and Accounts Payable to ensure the errors are corrected. |
