Effective July 1, 2014 through June 30, 2022, the California State Board of Equalization (SBOE) is offering a reduced sales/use tax rate on equipment purchased for research that has the potential to result in significant savings for UC Davis.
The reduced rate applies to machinery and equipment that will be used at least 50% of the time, and for over one year, in research and development anywhere in California. The SBOE has limited the reduced rate to a specific purchase amount over the calendar year, which will be monitored by Accounting & Financial Services (A&FS). A&FS will provide updates as more information is received.
The exemption includes leased equipment, special purpose buildings and non-inventorial equipment, such as computers.
The exemption reduces the current sales tax rate by 4.1875%, resulting in an effective rate of 3.3125% for research equipment delivered to campus. The effective rate may change if equipment is delivered to a different location in California.
A&FS is developing a process to facilitate and maximize UC Davis' benefit from this exemption. This will include identifying research equipment with a checkbox in KFS which will alert Contracting Services and the Tax Reporting & Compliance units. A&FS expects this process to be live in the next few months. In the interim, campus customers making a purchase that they believe qualifies for the partial tax exemption should complete the Partial Sales and Use Tax Exemption for Equipment Eligibility Checklist<http://accounting.ucdavis.edu/Forms/index.cfm?opt=8> and attach it to their KFS Requisition document in the Notes and Attachments section. A Contracting Services buyer will review the information provided to confirm that it qualifies for the tax reduction, then insert appropriate language and reduce the sales tax amount on the purchase order.
Please note that the SBOE allows for a retroactive refund of sales and use tax if UC Davis identifies qualifying equipment after the time of payment. For these purchases, please complete the Partial Sales and Use Tax Exemption for Equipment Eligibility Checklist<http://accounting.ucdavis.edu/Forms/index.cfm?opt=8> and forward to the Tax Reporting & Compliance unit. If the sales tax was paid directly to the vendor, Tax will issue an exemption certificate along with supporting documentation to the retailer. The retailer may then file a claim for refund for the overpaid portion of sales and use tax on the UC's behalf. If the transaction was subject to use tax where the UC self-assessed , then Tax will file a claim directly with the SBOE. Please visit the Tax Accounting website<http://accounting.ucdavis.edu/TA/> for further information.
Please contact Jamie Brannan ( or 530-752-9475) for more information.