Monday, April 13, 2009

Information on Reimbursement of Sales Tax For Business-Related Purchases

The Business Office recently conducted an internal audit of the on-line expense account system. Employees were asked to provide receipts for randomly selected purchases and cell phone reimbursements. It appears from our audit that employees are keeping their receipts and providing them when requested. Thanks and GOOD JOB!!

Business Office staff observed several instances when employees claimed reimbursement for a purchase but did not claim the accompanying sales tax. Because Heartland is a tax-exempt organization, it does not get charged sales tax on purchases. However, when employees personally pay for business-related supplies, they are charged sales tax. When employees make claims for those supplies, they should include the sales tax. If a receipt includes both personal and business-related items, the employee should compute the amount of tax applicable on the business items and include it in the amount claimed for reimbursement.

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