Updates to the sales tax policy requirements for e-Reimbursement

Expense Reimbursement Tax Tolerance Guidance: Similar to Purchasing Card Procedure, the Division of Business Services has authorized a “Tax Tolerance Level” for the review and approval of expense reports.  Effective December 1, 2022, if an e-Reimbursement Approver/Auditor notes an expense line with sales and use tax paid in error, the following guidance should be used:
    • $25 or less: If the amount of sales tax paid in error is $25 or less, the Approver/Auditor may note the non-compliant amount, but approve the amount for reimbursement, citing the following Immateriality Clause: “Sales tax paid in error for this transaction does not meet the materiality threshold of $25 for the University of Wisconsin–Madison; as such, immaterial sales tax will be reimbursed.”
    • Greater than $25:
      • Includes a documented attempt to obtain exemption: If the amount of sales tax paid in error is greater than $25 and the claimant has documented an attempt to either obtain exemption or obtain a refund (without success), the Approver/Auditor may approve the amount for reimbursement.
      • Does not include a documented attempt to obtain exemption: If the amount of sales tax paid in error is greater than $25, but the claimant did not document an attempt to either obtain exemption or obtain a refund, the Approver/Auditor must reduce the reimbursable amount to the pre-tax total.
This policy update applies to using a personal card for expense when the tax-exempt card is not honored by a vendor. Every effort should continue to be made to get tax removed when paying for goods/services on behalf of UW–Madison.  Please let me (kelly.layton@wisc.edu) know if you have any questions about this policy update.