Purchases by or on behalf of the University (in Indiana)
The University is a governmental agency created by an Indiana Code statute. It is, therefore, entitled to certain exemptions from tax for purchases and sales that support the exempt government function and educational mission of the institution. Transactions that do not support the University’s exempt educational mission or that are associated with a proprietary activity are subject to tax.
Transactions involving tangible personal property or services are exempt from sales tax pursuant to Indiana Code 6-2.5-5-16 if the purchases are invoiced directly to the University and paid for directly via University funds, and the purchases are for an official University function and not a proprietary activity.
The requirement for expenses to be paid directly via University funds means that if an item is purchased with private funds and is to be reimbursed by the University, the purchase is not exempt and sales tax must be paid at the time of purchase.
If an item which would have been tax exempt if purchased directly with University funds is instead subject to sales tax due to purchase with private funds, any reimbursement will not include the sales tax paid.
In the State of Indiana, purchases for the private benefit of any individual, such as meals and lodging, are not eligible for exemption. Additionally, purchases used for social purposes are never exempt. Tangible personal property purchased for resale by the University is eligible for the sales tax exemption. If an item is purchased on a tax-free basis and is later used for a proprietary purpose the University is liable for use tax on that item.
The University is recognized as exempt from sales tax in several other states. Please see the Sales Tax Exemptions Matrix (PDF) and contact University Tax Compliance (view email) to request any forms you may need including the Indiana exemption certificate (Form ST-105).
Sales by the University
Sales of tangible personal property as part of a proprietary activity by the University are generally subject to sales tax. Please see the Sales Tax Collection Matrix for a complete breakdown of collection responsibilities based on the purchaser.
A large exception to the proprietary activities rule is the sale of food directly to or for the primary benefit of students. Such sales may take place on an exempt basis as long as certain conditions are met.
For more information please see the Procedure for Collecting and Paying Sales Tax.