Sales Tax Exemptions

LAST UPDATED: November 4, 2016

What You Should Know

Princeton University is a 501(c)(3) entity under the Internal Revenue Code and is exempt from federal income tax as an educational institution. Many states also recognize our 501(c)(3) status and offer exemption from paying sales tax on goods or services purchased in that state. Sales tax is a substantial expense for the University, and all efforts should be made to avoid incurring sales tax in those states that have granted an exemption.

Procurement Services has pursued exemptions from all fifty states and has received approval in 25 states. In addition, five states do not charge sales tax. It is important to note that purchases in states that have not granted an exemption may still be tax exempt depending on where the goods are delivered/services are provided. Learn more about the University's tax exempt status, restrictions on purchases, and use of tax exmpt forms.

In order to be exempt from paying sales taxes, most states require a completed sales tax exemption form be submitted to the seller at the time of the purchase. The forms vary by state but typically require completion of certain information about the transaction such as the seller’s name, address, and a description of the goods or services being purchased. Wherever possible, the forms have been pre-filled and signed to expedite completion. The downloadable file for each state includes instructions outlining how to obtain the exemption.

The correct form to use is determined by where the goods will be delivered/services used. That is the state that assesses whether the sale is tax exempt:

  • If making a purchase in New Jersey, use the New Jersey sales tax exemption form.
  • If making a purchase from another state that will be delivered to New Jersey, use the New Jersey form.
  • If making a purchase that will be delivered to another state, use that state’s sales tax exemption form. If that state does not recognize our tax exemption, the purchase is not tax exempt.
  • If traveling to another state, use that state’s form for any goods or services purchased including meals and lodging. If that state does not recognize our tax exemption, the purchase is not tax exempt.

As a general rule, the following conditions must be met for a purchase to qualify as tax exempt:

  • The purchase must be for University business expenses. Do not use these forms for personal purchases.
  • The purchase must be made with University funds, either via purchase order, T&E card, or a departmental purchasing card. Purchases made with personal funds are not tax exempt even if the purchase is subsequently reimbursed by the University.
  • The purchase cannot be for resale.

To obtain a certificate

The chart below highlights our tax exemption status in each state. Exemption forms for each state can be found here (login required).  If you are unable to log in, please contact the Financial Service Center to obtain a certificate.

Please Note: Purchases made from businesses in those states that have not granted an exemption, but are shipped to New Jersey, are tax exempt. When making the purchase, provide the seller a copy of the New Jersey sales tax exemption certificate in order to receive the exemption.

For More Information

Learn more about the University's sales tax exempt status, restrictions on purchases, and use of sales tax exempt certificates.

For questions regarding sales and use tax exemptions, please contact the Financial Service Center at (609) 258-3080 or finance@princeton.edu.


 

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