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California Sales Tax Increase 1/1/2013

The California State Board of Equalization (BOE) has announced that effective 1/1/13 the California base Sales and Use Tax rate will increase by .25% from 7.25 to 7.50%. Vendors with business ties to California will be required to begin collecting tax at the new rate effective 1/1/13.

When is the tax rate calculated?
The buyer is subject to the tax rate at the point of sale. The point of sale generally occurs when your department takes title to, or possession of, an item.

Do I need to do anything to update the tax rate for my zip code?
The tax information in DaFIS will be automatically updated, so that effective 1/1/13, tax rates for all California zip codes will increase by .25%. There is nothing that your department needs to do to update the tax rate calculation for the zip codes that you use.

Other systems that use DaFIS tax rate information, including UCD Buy and the Purchasing Card program (for system-assessed tax on purchases from out-of-state vendors), will also begin automatically calculating the new tax rate on 1/1/13.

How will the transition work in DaFIS?
In general, you should not have to change the tax amount calculated on a DaFIS document, but there is one exception:

If your department took possession of an item before 1/1/13 (point of sale occurred before 1/1/13), and you are processing the VI after 1/1/13, you will need to manually change the Tax Amount field on your VI to reflect the previous tax rate.

Add a note to the VI indicating that you have adjusted the tax amount since the point of sale occurred prior to 1/1/13.

What if a vendor appears to be charging the incorrect tax rate?
Before contacting the vendor, double-check the dates listed on the invoice. Even though you may have received the invoice after 1/1/13, the point of sale may have occurred before 1/1/13, meaning that the old tax rate should be assessed. If you determine that the tax rate is incorrect on the vendor's invoice, you should contact them and ask for a corrected vendor invoice.

What will the Davis campus and city of Davis tax rates be effective 1/1/13?

Questions?
Contact the FIS Help Desk.


 
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