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California Sales Tax Increase 4/1/09

The California State Board of Equalization (BOE) has announced that effective 4/1/09 the California base Sales and Use Tax rate will increase by 1% from 7.25 to 8.25%. The increase in the state rate will result in a combined rate, including county and district taxes, ranging from 8.25 to 10.25%. Vendors with business ties to California will be required to begin collecting the additional 1% tax effective 4/1/09.

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.

The tax information in DaFIS will be automatically updated, so that effective 4/1/09, tax rates for all California zip codes will increase by 1%. 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 4/1/09.

• Purchasing documents and vendor invoices created in DaFIS before 4/1/09 will calculate the old tax rate.
• Purchasing documents and vendor invoices created in DaFIS on or after 4/1/09 will calculate the new tax rate.
• Purchasing documents created before 4/1/09 will calculate the old tax rate and the vendor invoices created against those purchasing documents on or after 4/1/09 will calculate the new tax rate.

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 4/1/09 (point of sale occurred before 4/1/09), and you are processing the VI after 4/1/09, 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 4/1/09.

The dollar limit on the Purchasing Card and on the Open Vendor type of Departmental Purchase Order (DPO) is $4999, including taxes. When using your Purchasing Card or processing a DaFIS DPO a few days before 4/1/09, keep in mind that the tax increase on 4/1/09 could mean that a purchase below $4999 could go above that limit if the sale does not occur until April.

If you find that your department has exceeded the departmental purchasing delegation due to the tax increase, contact Purchasing at (530) 747-3850 for assistance.

Before contacting the vendor, double-check the dates listed on the invoice. Even though you may have received the invoice after 4/1/09, the point of sale may have occurred before 4/1/09, 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.

• The Davis core campus tax rate will be 8.25%. See the City of Davis - Zip Codes & Tax Rates page for more information.
• The City of Davis tax rate will be 8.75%.

Contact the DaFIS Help Desk.