Tax Accounting

Sales and Use Tax Updates

Effective January 1, 2017.  The California statewide sales and use tax rate will decrease one-quarter of one percent (0.25%) from 7.50 percent to 7.25 percent on January 1, 2017. The rate decrease is due to the expiration of Proposition 30 passed by California voters in 2012.  The decrease in the statewide rate is effective for all cities and counties in California; however, the actual sales and use tax rate may still be higher than the statewide rate in many jurisdictions in California due to the addition of district taxes.  

The Partial Sales and Use Tax Exemption for equipment used in Research & Development decreases by .25%, to 3.9375%, to correspond with the reduction in the statewide rate.  The reduced sales tax rate charged to qualified equipment remains constant at 3.3125% 

Effective April 1, 2017.  Additionally, several city and county districts passes sales and use tax increases effective April 1, 2017.  The rates presented are inclusive of current statewide sales and use tax rate of 7.25%.   Common sales & use tax rates paid by campus departments are listed below for reference.

Sales Tax District

Current Sales Tax Rate

Sales Tax Rate Effective 01/01/2017

City of Davis

8.50%

8.25%

UCD Campus  - Unincorporated yolo county*

7.50%

7.25%

City of Sacramento

8.50%

8.25%

*Departments on the main campus should indicate unincorporated county location by using the 5270 zip code suffix.

Sales Tax District

Current Sales Tax Rate

Sales Tax Rate Effective 04/01/2017

City of Capitola

8.50%

9.00%

City of Clearlake

7.75%

8.75%

City of Lakeport

7.75%

8.75%

City of Los Banos

7.75%

8.25%

City of Placerville

7.75%

8.25%

City of Rohnert Park

8.50%

8.625%

City of Salinas

8.875%

9.25%

City of Santa Rosa

8.50%

8.625%

City of Sebastopol

8.75%

8.875%

City of Stockton

8.75%

9.00%

City of West Sacramento

7.75%

8.00%

Town of Truckee

8.125%

8.25%

Merced County

7.25%

7.75%

Monterey County

7.375%

7.75%

Nevada County

7.375%

7.50%

San Mateo County

8.75%

8.75%

Santa Clara County

8.50%

9.00%

Santa Cruz County

8.00%

8.50%

Sonoma County

8.00%

8.125%

Stanislaus County

7.375%

7.875%

When should departments see a lower sales tax rate?

Merchandise delivered after Sales Tax Effective Date (e.g., 01/01/17 or 04/01/17) should have the new rate.  The applicable sales and use tax rate is the rate in effect with the sale occurs – which is generally when the department takes title to, or possession of an item.    Unless the sales contract specifies title passes prior to the effective date of the rate, merchandise, the new rate is applicable.

How will the transition work in KFS?

 KFS has will have the updated Sales and Use Tax rates on the effective date.

  • Purchasing documents and vendor invoices created in KFS before effective date calculated the old tax rate.
  • Purchasing documents and vendor invoices in KFS on or after effective date will calculate the new tax rate.
  • Purchasing documents created before the effective date will be calculated at the old tax rate and the vendor invoices created against those purchasing documents on or after the effective date will be calculated at the new rate.

In general, you should not have to change the tax amount calculated on a KFS document, but there is one exception:

If your department took possession of an item before the effective date (point of sale occurred before the effective date) and you are processing the payment Request document after the effective date, you will need to manually change the Tax Amount Field on your PREQ to reflect the previous tax rate. 

Add a note to the PREQ indicating that you have adjusted the tax amount since the point of the sale occurred prior to effective date of a new sales tax rate.  Please include the district rate that has changed.

What if the 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 be received the invoice after the effective date, the point of sale may have occurred before the effective date, 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.

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