State Tax

State Sales Tax  

Sales tax is a tax imposed by state/local government on tangible personal properties and certain types of services; it is paid by the consumer and remitted to the tax authority by the business. Sales tax is a type of indirect tax and is different from direct tax, such as income tax, where the taxpayer pays directly to the tax authority. Each state in the U.S. has its own sales tax laws.

Rice - Sales

Rice must collect and remit Texas sales use tax on all taxable items it sells.

Rice has a state-issued Texas Sales and Use Tax Permit.

Rice can qualify for two one-day tax-free sales or auctions each calendar year.  The exemption does not apply to items sold for more than $5,000 unless the item is manufactured by Rice or is donated to Rice and is not sold back to the person who donated the item.

TX taxable sales (6.25% state tax plus up to 2% local tax): This applies to all retail sales and leases/rentals of most tangible personal property unless exceptions apply.  Services, in general, are not taxable unless specifically listed as taxable services by TX state law.

Examples of taxable sales: 

• Any photocopies charged for a fee
• Charges to the general public for parking 
• Rental of furniture, table, and chairs
• Income from the lease of lab equipment without an operator 
• Food, candy, and soft drinks sold through vending machines

Rice selling departments shall record all taxable revenue (including TX sales tax collected) to revenue account for Sales Subject to TX Sales Tax on a timely basis. The Tax office files quarterly TX sales use tax returns, and remits taxes to the state.

Rice - Purchases

Rice's TX Sales and Use Tax Exemption Certificate

• This certificate doesn’t need a “number” to be valid, and it doesn't have a validation or expiration date.
• Purchase must be related to Rice’s exempt functions
• No tax exemption for:
  •  Purchase, lease, or rental of motor vehicle
  •  Purchase of liquor/alcoholic beverage
  •  Items of a personal nature, e.g. meals, toiletries, clothing, and laundry services
• Business meals:
  • TX state rules view meals as “items of a personal nature”; however, there is no clear guidance on such a definition. Business meals could be treated not as “items of personal nature” if purchased using a Pcard and by providing the restaurant with a properly completed Rice TX Sales Use Tax Certificate. Business meals, however, if purchased by cash or personal credit card, will be treated as “items of personal nature” and thus taxable, even if they are related to Rice’s business activities and reimbursed by the university fund.
• Vendor's website's request for online submission of TX Sales and Use Tax Exemption Certificate:
  • From time to time, when departments make direct online purchases through a vendor's website, the vendor's website may require completion of Rice's TX Sales and Use Tax Exemption Certificate by following the vendor's own online format. Please contact Tax@rice.edu for assistance. 

Rice's TX Hotel Occupancy Tax Exemption Certificate

• Exemption from TX state‐level sales tax only
• No exemption from TX local hotel tax
• Exemption doesn’t require paying the hotel using a Pcard

Out-of-State Exemptions

An exemption is available only in the event the purchase is made on behalf of the university and paid for by university funds, such as a Pcard. 

The forms listed below can be used to exempt sales & use tax and/or hotel tax imposed by various states. Tax exemptions may apply to Rice remote working employees out of TX, as well as Rice business travelers out of TX. However, each state's exemptions are subject to the laws of the particular state. Please refer to the memo in front of each state form for further guidance. For states not listed below, an exemption is not currently available. As state laws are constantly changing, the list below will be updated periodically.

Questions?

Contact Tax@rice.edu