Baylor University
Tax & Compliance Department
Financial Services

Texas Sales Tax Issues - Sales

Taxable Sales

Sales tax must generally be collected and remitted to the State for any sales conducted in the name of Baylor University by an authorized agent or employee.  When a department plans to resell items, it must give the original vendor a resale certificate and then collect sales tax from the final purchaser. This requirement covers the sale of tangible items (e.g. t-shirts, mugs, promotional items, etc.) and certain services. This includes items that feature the department’s name for membership or promotional purposes.

If the sales price of an item includes sales tax, the individuals purchasing items at such sales must be notified, either by a sign stating or by a receipt showing that sales tax is included in the price. If a sign is used, the sign should be kept afterwards for documentation purposes. If such notification is not provided, sales tax should be calculated on top of the stated sales price and collected from the purchaser. 

In addition, if a department is hosting a luncheon or other meal where the overall cost of the ticket covers the food provided, the event registration is taxable. This should be distinguished from an educational seminar over an extended timeframe, or a competition entry fee, which is covered as an amusement service under Non-Taxable Sales below. 

If a department has any questions as to whether an item sold or an event registration should be taxed, it should contact either Darren Bell, darren_bell@baylor.edu, or Joanie Pustejovsky, joanie_pustejovsky@baylor.edu before the sale is conducted. 

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Departmental Deposit Entry

When a department has made a taxable sale where sales tax is included in the price and enters the revenue on the departmental deposit form, the total amount of revenue collected should be entered in the *Amount box. The Taxable box above the *Amount box should then be selected. This will cause the system to breakout sales tax from the total at the correct rate for Waco area sales and move the funds into the correct account for tax reporting purposes. Please reference the Sales Tax Help link on the departmental deposit form for further information. 

If the department has made a taxable sale where sales tax was not included in the price, but instead calculated on top of the stated price and collected separately, do not check the Taxable box. Instead, a separate line item entry should made entering the sales tax amount into the 2160 account. 

Also, please note that if the sale has taken place outside of Waco, the department needs to contact Joanie Pustejovsky, joanie_pustejovsky@baylor.edu, for a determination of the correct sales tax rate and reporting procedures. 

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Non-Taxable Sales

There are certain tax-free sales that are permitted by the State of Texas. Baylor University does not have to collect sales tax when the University is the provider of the amusement service, i.e. athletic events, concerts, etc. Therefore, all tickets to such events are tax-free; however, amusement services are clearly defined under Texas statute, and any department considering such an event should contact the Tax and Compliance Department to ensure the event qualifies. For instance, exempt amusement services do not include speakers simply presenting at a luncheon. Also, some items sold as part of these events may be taxable; parking sold individually, for example, is taxable. 

In addition, Baylor University can hold two one-day, tax-free sales or auctions each calendar year. One day is equivalent to twenty-four hours. This exemption does not apply to items sold for more than $5,000 unless the items are manufactured by Baylor, or the items are donated to Baylor and not sold back to the donor. Baylor University administration annually make a determination of what events are chosen to hold this designation. 

Similarly, University student organizations that have received an affiliated certification from Baylor can hold a one-day tax-free sale each month, if the purpose of the sale is to raise funds for the organization. This exemption does not apply to items sold for more than $5,000 unless the item is manufactured by the student organization or the item is donated to the student organization and not sold back to the donor. An organization will receive notification if it requests affiliated student organization.

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