Sales of tangible property and purchases made by Stanford are subject to California law governing sales and use tax. The State of California and all of its agencies are subject to sales and use tax including nonprofit organizations. Note that the federal government and other state agencies other than California are exempt from sales and use tax.
This content is intended to assist in the proper application of California Sales and Use tax law to purchases and sales of goods and services made by Stanford.
Current Sales and Use Tax Rates Applicable to Stanford:
|Location||Total Tax Rate||State Tax Rate||County Tax Rate||City/District Tax Rate|
|Santa Clara County (Main Campus)||9.125%||7.25%||1.875%||––|
|San Mateo County (SLAC)||9.375%||7.25%||2.125%||––|
|Monterey (Pacific Grove)||8.75%||7.25%||0.50%||1.00%|
The State Rate is effective January 1, 2017. City/County rates are effective July 1, 2021.
For all other sales, outside the above mentioned locations, please visit the California Department of Tax and Fee Administration (CDTFA) website for the current tax rate.
When Sales and Use Tax Applies
State sales tax applies to sales/purchases of tangible personal property that occur in the State. Sales tax is a vendor's liability and California vendors are responsible for collecting and remitting the state sales tax due.
Use tax is due on sales/purchases of tangible personal property when the property originates outside the State of California and is shipped in for "use" in California.
County transit district tax is both a sales and use tax and applies to sales within the State and use within various counties.
Goods and Services Subject to Tax
Most tangible goods are subject to sales and use tax and most services are not. (Note: sales and use tax regulations provide that certain items may be exempt from tax. For example, meals sold to currently registered Stanford students by the university food service are exempt from tax).
For more information on exemptions, please refer to Resource: Common Sales Tax Exempt Categories.
Get more information on rules and regulations from the CDTFA website.
Taxation of Transportation Charges
Tax does not apply to "separately stated" charges for transportation of property from the vendor to the purchaser, when the transportation is carried out by a party other than the vendor, i.e., by United States mail, an independent shipper or common carrier.
Transportation charges are regarded as "separately stated" only if they are separately specified in the contract for sale or invoice. "Shipping and handling" is not a separately stated charge. "Shipping," "Freight" and “Postage” are separately stated charges.
Handling is taxable.
When Buying for Stanford from a California-based Vendor
When purchasing goods or services for Stanford from a California-based vendor, it is the vendor's responsibility to collect the sales tax. To confirm that the seller is a California-based vendor, the vendor will need to provide a copy of their California Seller’s Permit or written confirmation.
When Buying for Stanford from a Vendor Outside of California
If the vendor does not hold a California Seller's Permit and the goods that are provided are taxable, the purchase will be subject to use tax. We must accrue use tax, if the vendor does not assess use tax on the invoice, at the combined tax rate applicable to the county where the item is used.
Out of state vendors may attempt to collect California sales and use tax on their invoice. They should not be paid unless they have properly registered with the State of California, California Department of Tax and Fee Administration to collect sales tax. Consult the CDTFA website.
When Selling for Stanford
If goods are sold to a point outside the state of California, do not charge California sales tax. Retain any documentation proving the out-of-state delivery (i.e., shipping invoices, delivery affidavits).
For deliveries, in California, of goods and services that are subject to sales tax, please refer to sales tax rate in the chart above.
Purchases Charged to Federal Grants or Contracts
Great care must be taken to determine who actually owns tangible personal property purchased with federal funds. Consult the provisions of the grant or contract for the title clause which determines whether Stanford or the government owns the purchased property. Not all government funded purchases will vest in the government. Sometimes the determination is made based on the purchase price of the item involved. If the government owns the property, no sales tax should be paid and no use tax should be accrued. In this case, the PO should specify that the purchase is exempt from sales tax because title to the property is held by the government.
Disclaimer: Stanford University does not offer personal tax advice. Nothing on this website shall be construed as the offering of tax advice. Stanford recommends seeking professional tax counsel whenever necessary.