Paying Sales Tax

General Overview of Sales Tax on Cornell Purchases 

Sales taxes are generally imposed on the purchase of tangible goods and, in some state or local jurisdictions, also on certain services. However, many states allow a nonprofit institution such as Cornell to be exempt from sales taxes.  In order to obtain an exemption from sales tax as a nonprofit, Cornell must typically apply for the exemption and be approved by the state. Please see the list of states where Cornell has been granted an exemption from tax. In addition to the states where Cornell has been granted an exemption from tax, there are five states that do not generally impose a sales/use tax: Alaska, Delaware, Montana, New Hampshire (but does tax meals and room rentals/hotels), and Oregon.

In order to make a purchase exempt from sales tax, you must typically provide the vendor in question with a copy of a state-specific sales tax exemption certificate. All of the university's sales tax exemption certificates listed are maintained by DFA. A current list of exemption certificates available can be found on the Sales Tax Exemption Certificates page. If you require a copy of a particular state's exemption, please email Tax with your request. Be sure to specify the type of good/service being purchased, the state, and how the expense will be paid (e.g., personal credit card, Cornell issued check, pcard, etc.).

Requirements for Using Cornell's Sales Tax Exemption

As a general rule, in most state and local jurisdictions where Cornell has been granted an exemption from sales tax (most notably New York), Cornell is only allowed to make a purchase exempt from tax if the following are satisfied:

1. The purchase is in furtherance of Cornell’s tax-exempt mission and has a department-approved business purpose.
2. Both the name of Cornell University and the employee making the purchase must be identified on any bill or invoice.
3. Cornell must be the “direct purchaser” of the good or service.
4. A properly completed sales tax exemption for that state is provided to the vendor.

Note: Failing to abide by these rules can result in the university losing its sales tax exemption in the state.

Example: Department M in Ithaca, New York hires a catering company to cater an on-campus event. Cornell contracts with the catering company. The catering company issues an invoice to Department M in the name of Cornell University. Cornell University pays the invoice via check. As Cornell paid via check and the invoice was issued in Cornell's name, Department M may provide the caterer with a New York sales tax exemption certificate.

If you have any questions regarding the application of sales tax to a particular good or service, whether an exemption certificate may be used in a particular fact pattern, or have any other sales tax questions, please email Tax with your question.