California sales and use tax law, administered by the state Board of Equalization (BOE) applies to the University of California and its campuses, including UCLA.
California sales tax is imposed on sellers for the sale of tangible personal property at retail in California. The use tax is imposed on consumers for the use, storage or consumption of tangible personal property in California.
How Sales Tax Applies to UCLA
- As a purchaser, UCLA pays sales tax to California vendors on taxable purchases made in California, unless the item is purchased for resale.
- As a seller, UCLA charges sales tax on sales to California customers external to the UC system. Sales between UCLA departments or between UC campuses are not subject to sales or use tax since the departments and campuses are part of the same legal entity.
How Use Tax Applies to UCLA
As a purchaser, UCLA accrues use tax on taxable purchases from out-of-state vendors who are not doing business in California and who do not charge California sales tax. Use tax is directly remitted to the state.
Exemptions from Sales & Use Tax
The law provides various exemptions from sales and use tax. Among these exemptions are most services and labor charges, items purchased for resale and computer software delivered electronically where no tangible personal property is transferred. For a list of common exemptions applicable to UCLA, see Related Information for Common Sales and Use Tax Exemptions. For the tax treatment of computer software licenses and maintenance agreements see the Software License — California Sales Tax Quick Reference Guide and the Software Maintenance — California Sales Tax Quick Reference Guide.
Obligation for Collecting Tax: California vs. Out-of-State Vendors
When UCLA makes a purchase from a California vendor, the sales tax is generally the vendor’s responsibility and is included in the vendor's invoice.
When UCLA purchases tangible personal property from an out-of-state vendor who is not “engaged in business” in California (e.g., has no California business location or employees), the vendor is not required to collect California sales tax. UCLA must accrue the correct amount of use tax on the transaction and remit it directly to the state.
Applicable Tax Rate
Effective October 1, 2017, the Los Angeles County district tax increased .25% due to the approval of Measure H by voters in March 2017. The sales and use tax rate in Los Angeles County (including the UCLA Westwood campus) is 9.50%, consisting of the 7.25% statewide rate and the 2.25% Los Angeles district rate. However, some cities within Los Angeles County have a higher combined rate. The total rate applicable to the City of Santa Monica is 10.25%. Current California sales and use tax rates and additional information on rate changes can be found on the CDTFA (California Department of Tax and Fee Administration) website.
A sale of tangible personal property made in California for resale is not taxable. If UCLA purchases an item for resale, a resale certificate should be issued to the vendor. All resale certificates are issued by Tax Services. When a department resells the item, it must then collect sales tax.
If UCLA makes a sale to a reseller, a timely, valid resale certificate should be obtained from the purchaser. For guidelines on what information the resale certificate should include, when it is considered timely and how to verify the seller’s permit number on the certificate, see Publication 103 - Sales for Resale on the BOE website.