Reimbursement for per diem for a trip for which there was no overnight stay, or
Reimbursement for expenses that are submitted more than 60 days from the date of trip completion; or, for non-travel expenses, the date of the expense. (Note: Reimbursement for expenses that are submitted more than 120 days from the date the expense was incurred are not reimbursable and will be returned unprocessed.)
These types of expense reimbursements are deemed taxable under Internal Revenue Code. (IRS Publication 463)
All business expense reimbursements require a complete, clear business purpose substantiated by original itemized receipts that show:
- proof of payment
- what was purchased
- name and location of vendor
- date of purchase
- list of attendees and their affiliation to the University (can be entered
on the electronic form)
Receipts are not required for mileage or your meals but you do need to provide personal vehicle license number for mileage reimbursement and departure and return times for per diem. (Receipts ARE required if you are requesting reimbursement for meals for anyone besides yourself.)
If a purchase was made for travel expense using a P-Card, keep the original on file at the Department and submit a copy of the P-Card purchase with your travel documentation.
Medicare (labeled on your pay stub as Fed MED/EE)
Social Security (labeled on your pay stub as Fed OASDI/EE)
Federal income tax (labeled on your pay stub as Fed Withholdng)
State income tax (labeled on your pay stub as ID Withholdng)
The amount that was reimbursed to you that is taxable will appear with a label of *’TX Travel’. This amount is not being paid to you on the paycheck (you already received the reimbursement by the time it appears on your paycheck) nor is it a deduction from your pay. The amount is being added only to your taxable gross pay so that taxes may be calculated. View Example Pay Stub
Gross pay and taxable gross pay are not always equal to each other. For example, if you are an hourly employee who participates in the University’s health insurance plan, your gross pay is your hourly rate multiplied by the number of hours for which you are being paid. However health insurance premiums are not taxable so the premium amount is subtracted from your gross pay to reach your taxable gross pay.
- Accounts Payable receives your Expense Report and backup documentation, reviews the Expense Report and flags taxable items.
- Your reimbursement is processed.
- Once a month, Accounts Payable will submit taxable expenses to the Tax Reporting Department for review. Upon completion of review, the information will be submitted to Payroll.
- Payroll adds the taxable amounts to your next pay check. The amounts appear with a label of ‘TX Travel’ on your pay stub.
This process allows you to receive your reimbursement before you pay any taxes on it.
Do not request per diem reimbursement for a trip with no overnight stay. (Please note: this answer relates specifically to how you can avoid paying taxes on this type of expense. The only way to avoid paying taxes on this type of expense is to not request reimbursement for it. Our intent is to inform you of the tax implications of the reimbursement, not to suggest you or your department change your expense reimbursement parameters.)
Submit requests for reimbursement of expenses no later than 60 days from the date of the trip completion; or, for non-travel expenses, the date of the purchase.
You and/or your department may set personal/departmental internal deadlines less than the 60 day maximum to give those who complete your ERs adequate time to accomplish the data entry. You might consider 45 days as an internal deadline. This would allow 15 days to complete the data entry. Even with internal deadlines in place, there will be rare occasions when something goes wrong and your ER is not completed within the 60 day maximum even though you submitted your receipts on time.
If this should occur, your department may write a memo that states the day you submitted your reimbursement receipts/documentation and why the ER was not completed within the 60 days. For example, “My travel ended 8/18/10, and I submitted my receipts on 9/24/10- However our staff person was not at work from 9/25/10 through 10/24/10 due to illness.” The memo should be signed by your department head and staff person to certify the day s/he or she received the receipts. Accounts Payable will retain the memo as evidence to the IRS that the traveler made an active and reasonable attempt to comply with the 60 day maximum. While we cannot guarantee the IRS will accept the memo as reasonable, we will process the reimbursement as non-taxable. If the IRS later determines that the reimbursement was taxable, the traveler will be responsible for the tax, interest, and any penalties.
We strongly encourage you and your department to develop a process for reimbursements that assures expenses are processed within the 60 day maximum and to establish a back-up plan for those times when the staff person who regularly completes ER forms is unavailable.
Consider creating two envelopes addressed to the staff person who completes your ER. As you accumulate receipts for Trip 1, put them in one of the envelopes. At the end of Trip 1, mail the envelope to the office and ask the staff person to begin preparation of your ER. Do the same for the second trip. You’ll be back in town at the end of Trip 3 and can personally deliver the receipts for that trip.
Boise State University is exempt from paying Idaho sales tax on purchases in the normal course of its business. However, the University’s sales tax exemption does not apply to sales of tangible property, rentals or services (unless the purchaser is exempt from sales tax).
Each department who makes taxable sales is responsible for maintaining complete documentation to support calculation of sales tax as well as support for all sales that are determined to be tax exempt.
Examples of supporting documentation include sales invoices showing sales tax collected. Documentation for exempt sales includes out-of-state shipping address or a properly completed sales tax exemption form such as an ST-101 or ST-104G.
Sales of Tangible Personal Property. Including (but not limited to): books, maps, office supplies, computers, food, concessions, chemicals, trees and plants, art, clothing, publications, pamphlets, and photocopies.
Admission Charges. Including admissions to recreational facilities, athletic events, concerts, theater productions, and entertainment events.
Rental of University Property. Including lodging, general room rentals, equipment and facilities. Note: rental of University facilities to taxable entities for events to which admission is charged is typically exempt as the sales tax is collected on the price of admission.
Blended Sales Transactions. Sometimes departments will make sales that include a taxable and a nontaxable amount. Examples include conference registrations or tickets to events where meals are included. These types of transactions will need to be reviewed on a case by case basis to determine appropriate handling of sales tax. Please contact the Tax Reporting Department.
As a general rule, sales to other University departments, Idaho state agencies, Idaho cities and school districts, or the federal government are not taxable. Proper documentation should be acquired from these agencies (ST-101, ST-104G, form or federal purchase order) and maintained on file within the selling department. Note: Sales made to any outside agency or private individual who cannot produce a properly completed exemption form are considered taxable. The department should collect the appropriate sales tax.
When a taxable sale occurs, sales tax must be collected at the point of sale. The Idaho state sales tax rate is currently 6%. Units can add 6% to their purchase price, or they can calculate a purchase price that includes sales tax.
Example: Selling price is $15.00; current tax rate is 6%.
|Ex. 1: Sales price excludes sales tax.||Ex. 2: Sales price includes sales tax.|
|$15.00 × 0.06 =||$ 0.90||$15.00 ÷ 1.06 =||$14.15|
|$15.00 + $0.90 =||$15.90||$15.00 - $14.15 =||$ 0.85|
|Price of item sold =||$15.00||Price of item sold =||$14.15|
|Sales tax =||$ 0.90||Sales tax =||$ 0.85|
|Total sale =||$15.90||Total sale =||$15.00|
Reporting Sales Tax. Departments will complete a deposit in the OFC Cash Transactions/Department Deposit Template. Please separate your taxable and nontaxable revenue. The Idaho sales tax account is 211016 and the cost segment is hard coded in the template. If you have any questions on what type of revenue is taxable, please contact Tax Reporting.
The Tax Reporting Department will remit and report the sales tax collected to the State of Idaho.
Forms and Documents from the IRS or State Tax Authorities
If you receive a form or letter from the IRS or other state or local tax authority, please call the Tax Reporting Department for instructions.