By SHANNON O. WELLS
Recent updates to the Concur Travel & Expense system requiring that Pennsylvania sales tax be exempted or removed from Pitt-approved expenses raised concerns during the Feb. 13 Faculty Affairs committee meeting.
Initiated last fall, the changes were brought to the committee’s attention through a primer sent from the Department of Physics & Astronomy. It indicated the University will not approve expenses with sales tax applied, as Pitt is classified as “sales tax exempt” in Pennsylvania.
All transactions where sales tax would normally be applied — with the exception of airfare— are required to have the sales tax removed, it said.
Those traveling to any of the 33 states in which Pitt has sales tax exemption agreements and who are using a Pitt charge card will be required to use a specific tax form for that state.
Several Faculty Assembly members expressed concern that the new policy places an undue burden on faculty when traveling, said committee Chair Frank Jenkins. “The primary concern focused on small purchases such as drinks and small meals when traveling.”
Faculty Affairs, he added, “would like to discuss the possibility of a revised policy in which small purchases were excluded from this policy, and that there would be a purchase price established in which costs below that amount would not require removal of associated taxes.”
Following the Faculty Affairs meeting, Senate Council President Robin Kear consulted with Hari Sastry, Pitt’s chief financial officer, and Maureen Beale, associate vice chancellor for financial operations in the CFO’s office, who clarified that:
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The University will approve expenses with sales tax, but it must be paid from some source, including department operating expense accounts if the tax expense is not allowable.
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While individual departments may require individuals to reimburse sales tax charged by vendors through the Concur system, the University itself does not.
“We are classified as a tax-exempt university and have been for over a century,” Kear explained. “I can understand that Pitt’s goal is to avoid paying state tax whenever possible as that reduces Pitt’s overall expenses.”
When sales tax is paid and should not have been, that expense becomes unallowable on a federal research grant and cannot be charged to those kinds of grants as an allowable expense, Sastry and Beale explained, and also is an unallowable expense, generally, for the state of Pennsylvania.
The University recommends charging sales tax expenses that are unallowable to an operating expense (02) account, such as a department- or unit-level account. The University has never asked individuals to reimburse sales tax, the CFO’s message said.
Changes initiated last September indicate that Concur will, for any charged expense, now ask the question, “Is there sales tax?” and the user must answer within Concur, the CFO’s office indicated. Departments or units can have a stricter policy than the University recommendations, and some departments may try to avoid the extra expense of sales tax wherever possible.
A tax department within the CFO’s office looks for the aggregate of all sales tax erroneously paid in a calendar year and attempts to recoup the largest amounts from those individual states. “This is a long and laborious process,” Sastry explained. “This process does attempt to reallocate back to the units, but it is not always possible, especially if grants have closed.”
The physics department memo, which prompted the Faculty Affairs discussion, laid out the following guidelines:
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If you’re already charged sales tax, contact the vendor and ask for a refund of the sales tax. New receipts must be added to the old receipt to prove sales tax was removed.
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If the vendor will not honor the tax-exempt policy and not refund the tax, add a comment into the expense type on Concur stating this and attach any written confirmation of the refusal.
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Sales tax will still be applied when booking hotels and car rentals through Concur/Anthony Travel. User should provide the sales tax form at check-in or when finalizing the bill or when picking up the car. Those who have traveled and need to submit now, need to have sales tax refunded. New receipts will be needed to prove sales tax was removed.
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Before making in-state purchases, or in states that accept Pitt’s tax-exempt policy, present the sales tax-exempt form to the vendor.
Shannon O. Wells is a writer for the University Times. Reach him at shannonw@pitt.edu.
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