Research Administration Office

University of California

Memo Operating Guidance

No. 93-19

December 7, 1993

Subject: Sales Tax on Equipment Purchased with AFOSR Funds

By letters to AFOSR and personal contracts at Federal Demonstration Meetings in Washington, D.C., RAO has requested and urged AFOSR to eliminate its policy of retaining tide to equipment to avoid California State sales tax.

We have received the enclosed letter dated November 30, 1993 from Harry Haraldsen, Chief, Policy and Support Division, Directorate of Contracts at AFOSR. As Mr. Haraldsen indicates, the Air Force will discontinue its practice of retaining tide to equipment purchased under AFOSR funds. This means that the University will obtain tide upon acquisition of the property and therefore will be subject to payment of State sales tax pursuant to Section 2-526 of the Contract and Grant Manual.

Applicable sales tax is an allowable cost against the grant or contract and should be included in the proposal budget submitted to AFOSR. As the letter from Mr. Haraldsen indicates, awards made on or after December 1, 1993, will include provision for reimbursement of applicable sales tax.

Refer: William Sellers 510-987-9847

Enclosure

Subject Index: 02, 16

Organization Index: F-205

David F. Mears

Director

Office of Research Administration

cc: David Barnard, w/encl.


DEPARTMENT OF THE AIR FORCE

AIR FORCE OFFICE OF SCIENTIFIC RESEARCH (AFMC)

BOLLING AIR FORCE BASE, DC

FROM:

AFOSR/PKC

110 Duncan Avenue Suite B115

Boiling AFB DC 20332-0001

SUBJ: Sales Tax

30 Nov 93

TO: Mr David F. Mears

Director, Research Administration Office University of California 300 Lakeside Drive Oakland CA 94612-3550

Regarding you letter of August 27, 1992, requesting that AFOSR reconsider of practice on payment of sales tax on equipment purchased under Air Force Grants and my letter of October 23, 1992, providing you an interim response to your request.

After long and careful consideration of your request, AFOSR will discontinue the practice of retaining title to equipment purchased with AFOSR funds. This policy will be effective December 1, 1993, and will be reflected in awards negotiated on or after that date.

I would like to express my thanks to you and your organization for your interests in AFOSR policies and procedure. I extend an invitation for your continued involvement. As always, if you have any questions regarding this or any other subject, please feel flee to contact me.

HARRY R HARALDSEN

Chief, Policy and Support Division Directorate of Contracts

cc:

Campus Contract and Grant Officers

Kate Phillips/COGR