Sales Tax on the P-Card
GW, as a non-profit entity, is exempt from paying sales tax on certain goods and services in states where we have received a tax exemption certificate. Currently there are 17 states in which GW holds tax exempt status.
Requirements for being tax exempt are that it must be the tax-exempt entity making the purchase, and the payment for the good or service must be made directly by that entity via P-card. Out-of-pocket purchases are not tax exempt. Each year the auditors review our purchases to see if unnecessary sales tax was paid for transactions where exemptions are held. Payment of sales tax is seen as a waste of University funds.
Prior to the issuance of a P-card, the cardholder must successfully pass a P-card training test that stresses the need to seek tax exemption when making a purchase. Procure-to-Pay has established a large number of contracts for schools, divisions and departments to use that are cost effective and are also tax exempt. Cardholders should use these resources as much as possible.
- I provided my tax exemption and I was still charged sales tax. What do I do?
First, contact the vendor and ask that they credit the P-Card for the sales tax. If that is not successful, you should call the number on the back of your card and dispute the charge. The card company will credit the card and you can request a charge for the amount minus the sales tax. Both the initial charge and credit still need to be filed on an expense report to fully reconcile the card.
- Where can I find the tax exemption certificates?
All exemptions are listed on the Tax department website. If you click on the state and scroll down you will get to a copy of the actual exemption. I recommend taking a picture of the exemption to have with you. If you are going to a state that is not on that list, we would pay the tax as normal.
- How do I get tax removed from airfare, rental car, etc.?
Sales tax is the only tax we are exempt from. It will generally never be on flights. Lodging depends on the state. Each state we are exempt in may have slightly different rules. For example, in Virginia lodging isn’t covered, but it is in Maryland. Please read the exemption description on the state to which you are traveling.
- How do I give my tax exemption during an online purchase?
Online purchases can be challenging. You may need to call them to provide the tax exemption information. It’s recommended that you purchase through already established vendors with GW through iBuy+ Vendors.
- I can’t get the tax removed. Now what do I do?
Recurring violations or disregard for the need to purchase goods and services without sales tax may be escalated to require repayment by individuals who repeatedly disregard the requirement to purchase items tax-free. This may also include the suspension and closure of their P-card.