For our OSU Extension units that have checking accounts collecting and paying sales tax is a three step process.
1) Collecting the money in the local checking account, via a credit card terminal or deposit transmittal form
2) Submitting a monthly report to the OSU Sales Tax office. This creates a debit to the liability of the fund you reference on the monthly report.
3) Clearing the debit in the liability with either A) the cash from the checking account or B) transfer from the fund on the sales tax form.
Step three is required because the original deposit (checking account, transfer from credit card company, etc) did not create a sales tax entry on the University’s general ledger. For example: the money collected for the tax collected in the checking account is sitting in the checking but the expense for the tax is in a University fund.
Annually the Business Office assists in helping off campus Extension offices to clean up this variance.
Each office that reported sales tax this year will receive a letter and eReport next week. This will detail the amount that has been reported for your unit since January 2015. Hand written notes are also included on the some of the reports if something requires further research or clarification.
Note: You do not need to do anything. If you choose not to reply to this communication we will simply do a journal entry to take the cash from the fund that is referenced. However, you may send a check to cover the sales tax collected for the time period. This check must be received in our office by 12/28/2015 in order for the amount to offset the sales tax. The check should be written for the amount above PLUS the sales tax collected for November 2015 (what you will report on 12/15/15). Attach the check to the letter you receive and mail to 4 Ag Administration Building, 2120 Fyffe Road, Columbus, OH 43210.
Frequently Asked Questions:
Q. What if the amount I calculated doesn’t match what is listed on the letter?
A. Please review the detail report attached to your letter and read any notes written by Cindy Buxton for your attention. If you find something has been missed, submit on your next sales tax report.
Q. Can I use our commissioner fund to report the sales tax?
A. No. The sales tax you collect is not commissioner money and therefore should not be reported in the commissioner fund. Only money received from the commissioner should be deposited in the commissioner fund.
Q. If I don’t send a check, how do I reconcile the sales tax in the checking account ledger?
A. If you choose not to send a check, the Business Office will process a journal to remove the liability from your eReports. When you receive the copy of that journal, use the journal number to make an entry on your checking account ledger. The entry should subtract the amount of sales tax from the sales tax column and add the amount to the “Admin” column. This should help the checking account ledger to balance.
Q. Should I report sales tax collected with a credit card terminal, via RegOnline or via a deposit form to my UNIV fund?
A. Yes, even if we are able to record the sales tax at the time of the deposit you still need to submit the total sales tax collected on your monthly form to the sales tax office.
Resources: Training > Accounts Receivable > Sales Tax
Questions: Shirley Lin