1. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 1 7100. General Accounting Procedures, 7137 Paying Sales Tax to Vendors A. The Purpose of This Policy The purpose of this policy is to provide guidelines to the accountant, general manager, office manager and department supervisors for paying sales tax. B. Overview of Sales Tax State governments administer sales tax laws. Collected sales taxes are payable to the state on various dates, usually monthly or quarterly. In California, sales tax rates may vary by city and county, because local governments are allowed to add amounts to the state sales tax rate. Pay the entire amount collected to the state, including the local government portion. Continue ►

2. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 2 7100. General Accounting Procedures, 7137 Paying Sales Tax to Vendors C. Responsibility for Sales Tax Payments The accountant and general manager are responsible for assuring sales tax is paid to vendors only when it is correct to do so. The general guideline is that our vendors may collect sales tax for most goods and few services, but the law varies for each state. Following are some guidelines, but there are exceptions. So check with the State Board of Equalization publications (or comparable government authority) for clarifications:  Pay sales tax on most goods purchased from within the state, except food and goods purchased for resale.  Do not pay sales tax on food.  Do not pay sales tax on goods purchased for resale to consumers or end users, including beverage, sundries, maps, etc. Continue ►

3. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 3 7100. General Accounting Procedures, 7137 Paying Sales Tax to Vendors C. Responsibility for Sales Tax Payments (cont.)  Do not pay sales tax on most services, such as installation charges and advertising.  Do not pay sales tax on some goods purchased from out of state. Some out-of-state vendors do not have authority to collect sales tax on behalf of your state. Before paying sales tax on an out-of-state purchase, ask the vendor for a copy of your state’s Reseller's Permit. Attach the copy to the invoice. Continue ►

4. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 4 7100. General Accounting Procedures, 7137 Paying Sales Tax to Vendors D. General Managers’ and Supervisors’ Responsibilities The accountant is responsible for accurately paying invoiced sales taxes. To assist the accountant, the general manager and supervisors do the following:  Be certain that vendors provide itemized invoices, separating taxable from non-taxable goods and services.  Be certain that the sales tax rate charged is correct.  Be certain that we do not pay sales tax for nontaxable services, goods to be resold and out-of-state goods. When you discover a questionable sales tax charge contact the vendor and resolve the matter before approving or paying the invoice. End

5. FINANCIAL MANAGEMENT GUIDE © Marin Management, Inc. 5 7100. General Accounting Procedures, 7137 Paying Sales Tax to Vendors