Requirements
The Partial R&D Sales & Use Tax Exemption applies to certain manufacturing and research & development equipment.
(See a PDF version of this page.)
Equipment must be a qualified tangible personal property that will be used primarily :
- For manufacturing, processing, refining, fabricating, or recycling.
- For research and development.
- To maintain, repair, measure or test any property being used for (1) or (2); or
- For the generation or production, storage or distribution of electric power
- As a special-purpose building and/or foundation.
Process
Principal investigators will complete and submit the following forms to the UC Merced shared services department via the General Purchasing Request prior to creating or submitting a requisition request.
- UC Merced Partial R&D Sales & Use Tax Exemption equipment eligibility checklist
- Partial Exemption Certificate for Manufacturing and Research & Development Equipment
- A quote from your preferred vendor
Please note: The Partial Exemption Certificate for Manufacturing and Research & Development Equipment form must be signed by the principal investigator.
Once reviewed, the above documents are submitted to UC Merced Tax Services to determine eligibility for the partial exemption. Completing the Partial R&D Equipment Eligibility Checklist and the CDTFA 230-M Partial Exemption Certificate does not guarantee eligibility for a sales tax reduction.
- If approved, Tax Services team will sign off on the Partial R&D Equipment Eligibility Checklist and upload the signed checklist to the General Purchasing Request .
- If denied, Tax Services will notate the reason for the denial on the General Purchasing Request.
Once the partial tax exemption certificate and eligibility documents are signed, the following items are needed in the general purchasing ticket: (1) the quote, (2) the UC Merced Partial R&D Sales & Use Tax Exemption equipment eligibility checklist and (3) the Partial Exemption Certificate for Manufacturing and Research & Development Equipment. Attach all documents to the requisition in Oracle for purchase order execution. Forms are submitted to the vendor with the associated purchase order to ensure the partial tax rate is applied to the invoice upon submission.
Applicability
Equipment purchases that meet the above criteria are considered eligible for submission of a Partial R&D Sales & Use Tax Exemption request.
Freight, shipping and handling costs, and services are not eligible for a Partial R&D Sales & Use Tax Exemption.
Responsible Individuals
Principal investigators are responsible for completing the Partial R&D Sales & Use Tax Exemption forms signing and attaching them to the General Purchasing Request.
Controls
Forms must be signed by Tax Services and align with Assembly Bill 398 (Chapter 135, Stats. 2017) and AB 131 (Chapter 252, Stats. 2017) amended Revenue and Taxation Code (R&TC) section 6377.1 to be allowable.
Exception Management
There are no exceptions to this process
