Overview

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 This article demonstrates how to properly apply the research equipment partial tax exemption to qualifying orders during checkout in Oracle Procurement.

Essential Information

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1. Qualifying items will be taxed at a reduced rate of 3.8125%.
2. To qualify, the purchase must be for new items that will be used at least 50% of the time, and for over one year, in research and  development in California. These items must meet the criteria for either Inventorial Equipment or be part of a Fabrication.
   1. Definition of Inventorial Equipment: Equipment acquired for $5,000 or more that is non-expendable, tangible, personal property which is freestanding, complete in itself, does not lose its identity or become a component part of another piece of equipment when put into use, and which has a normal life expectancy of more than one year. For additional information, please see Equipment Management Basics
   2. Definition of a Fabrication: Equipment that is constructed by a UCSD department for use by the University, and that upon completion must qualify as a piece of inventorial equipment. For additional information, please see How to Handle a Fabrication of Inventorial Equipment
3. Qualifying Purchase Orders (PO) that contain all the key points and necessary information are essentially considered to represent the partial tax exemption certificate. As a result, a separate certificate is not issued with each applicable PO. If this is not sufficient for the supplier’s requirements, they would need to send an email to payables@ucsd.edu to request a completed and signed certificate from our Tax Advisory Services group.
4. To retroactively apply to a previously approved Purchase Order, the department may initiate a requester-initiated Change Order to check the Partial Tax Exemption for R&D box on the appropriate distribution lines.
5. For additional instructions, refer to our other KBAs
   1. KB0032091: How to Create a PO Change Order in Oracle Procurement
   2. KB0031656: Fabrication Request Process

Next Steps

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 Navigate to Oracle

1. Log in here.
2. In Procure to Pay, click Purchase Requisitions.
3. Open your Requisition.

 

Check the Partial Tax Exemption for R&D Box

 

1. In checkout, click the Requisition line to highlight.
2. Under the Billing section of the line, click the Distribution line to highlight.

3. Scroll to the right and click the Partial Tax Exemption for R&D box.
4. Repeat for each Distribution line that qualifies.
   • Checking the box on each line is important as this is how Accounts Payables is notified to pay the tax at the reduced rate for that  particular line item.