1. What is required for my department to collect sales taxes?
You must contact Tax Administration prior to collecting sales taxes. All locations must be registered with the Florida Department of Revenue. Tax Administration will assist your department in coordinating this registration.
2. How are sales taxes remitted to the Department of Revenue?
In January or February each year, Tax Administration will provide a spreadsheet to registered departments for use in reporting the monthly sales tax numbers. Data reported on this spreadsheet includes gross sales, exempt sales, taxable sales, tax collected, prior month estimated taxes paid, and current month estimated taxes due.
Departments should complete the sales tax spreadsheet and e-mail it to Tax & Compliance
The Florida Department of Revenue receives payment electronically from the University’s clearing account. Accordingly, each department budget must be charged the appropriate amount of tax and those monies returned to the clearing account. A revenue refund (via Form DR-01) is used to accomplish this purpose. Please ensure to send this form along with the tax return directly to the Tax Manager instead of Accounts Payable for processing.
When completing the revenue refund form, departments should report the budget and amount of tax to be charged. In the area of the form requesting Account Number, departments should use the revenue account code that was used when the revenue was initially deposited. Departments should not use the sales tax liability account code 311001 as it creates atypical balances and financial statement reporting beginning balance errors due to the effect of the estimated sales tax payments and credits.
3. How often does the Department of Revenue perform sales tax audits?
The timing of DOR sales tax audits is unpredictable, but they occur approximately every five years. The scope of the audit covers a 3-year time period, and it is essential that departments maintain adequate records and documentation for the amounts reported as taxable and exempt sales and taxes collected and remitted. The DOR auditors will visit each registered sales tax location to review departmental records.
4. How do I receive sales tax-related training?
Contact Tax Administration to arrange a training session for your department. Please remember to contact Tax Administration whenever there is turnover of employees with sales tax collection or recording responsibilities.
5. What types of purchases are eligible for the sales tax exemption?
The University’s consumer’s certificate of exemption is only valid for purchases made and paid for directly by the University. P-Card and T-Card purchases are eligible for this exemption as well. However, if an employee uses a personal credit or debit card to pay a hotel bill or make another kind of business purchase on behalf of the university, sales tax is due and payable on that transaction.
6. Are student organizations and club bank accounts exempt from sales taxes?
No. The University’s sales tax exemption does not extend to purchases from student organizations’ club bank accounts.
7. Which states accept the University's sales tax exemption status?
Currently, the University is only exempt from sales tax on purchases made in the states of Florida. Purchases that are made and delivery is taken in other states, including P-Card or T-Card transactions, are subject to the applicable sales tax of that state.
1. What criteria must activities meet to be considered unrelated business income?
An activity may be considered an unrelated trade or business if its operations meet ALL the criteria listed below:
Trade or Business
The term “trade or business” generally includes any activity carried on for the production of income from selling goods or performing services. A trade or business activity is one in which a profit is expected to be made. However, when an activity that is carried on for a profit incurs a loss, no part of the trade or business is excluded from the for profit classification merely because its current operations does not result in a profit in a particular year. In addition, an activity does not lose its identity as a trade or business when it is carried on within a larger complex of other endeavors which may be related to the exempt purposes of the University.
Regularly Carried On
The trade or business must also be considered “regularly carried on“. This test considers the frequency, continuity of operations and the manner in which the activities are conducted. Comparisons of the university activity must be made with similar commercial activities to arrive at a determination whether the activity may be taxable.
Not Substantially Related to Exempt Purposes
A regularly conducted trade or business is subject to tax if it is also not substantially related to the exercise or performance of the exempt functions of the University. The University’s need for the income from the activity to further its exempt activities does not change the taxable nature of the income produced from the unrelated activity.
2. What types of activities are generally INCLUDED in unrelated business income taxes (UBIT)?
Unrelated business income can be generated from a large variety of university activities. As a general rule, providing goods or services to the public (alumni is included in this category) is considered a taxable activity. Other examples of activities that would most likely generate UBIT are:
- Most forms of advertising that generate revenue for the University
- Rental or sales of mailing lists
- Routine analytical or testing services to non-university users
- Travel tours for alumni or tour purpose is not authentic educational activity
- Renting equipment to non-university personnel
- Excess computer time sold to an outside company
- Online stores linked to University web sites
- Printing or audio visual sales and services to non-university users
- Parking revenues generated from general public attendance at a non-university sponsored even
In addition to the activity itself, consideration must be given to where the activity is conducted. If any portion of a property, whose construction was financed with tax-exempt bonds, is used to conduct unrelated business activities, the bond financing could lose its tax exempt status. The percentage of unrelated activity taking place on the property must be monitored to insure the overall use of the facility by exempt activities is sufficient to prevent challenges to the tax-exempt status of the property’s financing.
3. What types of activities are generally EXCLUDED from UBIT?
There are specific activities identified in the federal tax law which are exempted from unrelated business income tax even though they may otherwise have the characteristics of an unrelated trade or business:
Real Property Rents
Rent collected from outside entities is considered passive and not subject to UBIT. However, the exclusion may be lost if personal services or use of equipment are included in the rental agreement.
Income from Research Activities
In general, revenue received from research activities is excluded from unrelated business income taxes. There are certain situations that may require further analysis to determine if they fit the research exception. For example, ordinary testing and inspection of products or materials is normally not exempt from UBIT.
Member Convenience Activities
An unrelated activity conducted by the University for the benefit of its members (students, faculty, and staff) is not subject to tax unless the income is generated from sales to non-members. In this case only the non-member generated income is taxable.
Dividends, Interest, Annuities, and Royalties
These sources of income are considered passive and are generally excluded from UBIT. However, consideration must be given to the investment generating the income before a determination to exclude from UBIT. Investments in controlled organizations, partnerships, “S” Corporations, etc. will generally result in UBIT.
4. How are the University's unrelated business income taxes reported to the IRS?
Once a year, Tax & Compliance distributes an electronic survey to all auxiliary, activity, and athletic funds budget managers requesting information about the previous fiscal year’s revenues. This survey requires budget managers to categorize their revenues by the following sources: students, faculty/staff, university departments, foundations, state government, general public, and other. Accordingly, it is important that these departments have a means of classifying and documenting these sources of sales revenue properly.
Tax & Compliance reviews each survey to determine whether any potentially unrelated revenues were earned during the previous fiscal year. Departments that are found to have the potential for unrelated business revenue will receive follow-up contact from Tax & Compliance to further assess the details related to any unrelated business revenue.
5. Who should I contact with other questions about UBIT?
Tax Administration is available to help you with other, specific questions you may have regarding unrelated business income taxes.
1. What is the 1098-T Form?
The 1098-T is used to assist students and parents in determining whether or not they are eligible for Education Tax Credits.
2. What if the charges on my 1098-T are not correct?
The 1098-T only reflects information collected by year. Therefore the form would include information from Spring, Summer and Fall of the previous calendar/tax year. The form will not contain any payment information from Spring of the new year, even though it is distributed after the fee payment deadline in Spring of the new year. Please contact Student Business Services at (850)644-9452 with further discrepancies.
3. When will I receive my 1098-T form?
Forms are mailed annually and must be sent on or before January 31st. If students have opted to receive their form electronically they will receive an email as soon as the forms are available for viewing.
4. I can't find my 1098-T. How do I get a reprint?
The most recent and previous tax years forms are available electronically through ECSI and Florida State University's MyFSU. By visiting the Tax Information- Form 1098-T link through MyFSU, you will be brought to ECSI's homepage where your 1098-T is housed under the "Tax Information" link.
Students may also request that a form be re-mailed directly from ECSI by calling (888)549-3274 and requesting that a new form be mailed.
5. How do I update my address if I move?
The forms are mailed to the permanent addresses of those individuals who have opted not to receive their 1098-T electronically. The permanent address may be updated and maintained through the MyFSU site. By logging in and clicking on “Secure Apps”, a student may select to “Change My Address” from the list of available links.
6. Can international students receive a 1098-T form and Education Tax Credits?
Legal Resident Aliens may be eligible to receive the 1098-T form per section 25 A (g) (7) IRS Tax Code.
7. Am I eligible to receive tax credits and does this form validate the taxability of my financial aid?
Student Business Services is not permitted to offer tax advice to students or parents. For information regarding the taxability of your scholarships and grants, or to learn about your tax credit eligibility, please contact your tax professional.
Do departments need to submit payments when they receive an internal invoice?
No. These payments are handled systematically. No action is needed on the department’s part to initiate the internal payment.
1. Does our department need to apply to be authorized as a cash collection point?
If your department collects more than $5,000 annually you must be authorized as a Cash Collection Point (and re-authorized every 3 yrs). The Cash Collection Point Application can be found in the Forms section of the Controller's website.
2. What is a “draft capture system” for approvals?
The “draft capture system” pertains to credit cards. It is the closeout process on your credit card machine.
3. How can our department receive a copy of the dishonored check list?
Contact Alisha Estep at (644-9436) in Student Business Services and ask to be added to the email list.
4. How can our department obtain an endorsement stamp?
Each site is assigned a deposit area number by Student Business Services. Your department must be authorized as a Cash Collection Point before an area number will be assigned. The contact in Student Business to order or reorder a stamp can be reached at (644-9435). Please allow at least three weeks for delivery. Your endorsement stamp will include your campus department name and assigned area number.
5. Can our department use a generic receipt book?
No. All University departments are required to provide an official FSU pre-numbered receipt for each payment received. Official FSU receipt books can be obtained from the campus UPS store(561-9180).
6. Is it necessary that our employees have a police background check?
Yes. University Policy OP-C-7-G12 states "pre-employment criminal history background checks shall be required for A&P, USPS, and OPS positions that handle cash (except petty cash), checks, or credit/debit cards."
7. How many employees does our department need in the cash handling process?
If there is a biller/invoicer, that person should have no other function in the cash handling process. Ideally, collections, deposits and reconciliations should be segregated as well.
If there are insufficient personnel, a two-way segregation of duties can be used. In a two-way segregation the same person can do collections and deposits; however, the reconciliation must be completed by a different person.
8. What information should we be recording in our department's check log?
For checks received in person, please refer to section OP-D-2-B4 of the University's Cash Management Policy. For checks received through the mail, at a minimum the following should be recorded on a check log:
Date Check Received
Deposit Slip #
Additionally, a Check Log Template is available to assist departments in properly recording the receipt of checks.
9. Does our department need to use a tamper resistant bag when making deposits?
Yes. If your department needs to order tamper resistant bags, please contact Mary Eichler at 850-644-9030 in Student Business Services.
10. Our department plans to make deposits directly to the bank, how do we go about obtaining armored car service?
You are encouraged to contact Mary Eichler (644-9030) in Student Business Services to help arrange a quote for armored car delivery service.
11. Are there additional requirements if our department plans to accept credit cards?
Yes. If your campus department plans to accept credit/debit cards you will need to complete an Application for Credit Card Merchants, familiarize yourself with the University's Payment Card Policy, and complete the FSU Merchant Agreement. For additional information on the acceptance of credit/debit cards, contact Curt Caito (644-9475) in Cash Management and Banking Services.
Updated - 10/21/19