Office/Contact: Accounts Payable Office
Source: SDBOR Accounting Policies & Procedures Manual
Link: http://www.sdstate.edu/about/policies/finance/upload/12-1-1-BOR-Accounting-PoliciesProcedures-Manual.pdf
SOUTH DAKOTA STATE UNIVERSITY
Policy and Procedure Manual
SUBJECT: Goods or Services Sold to the General Public
NUMBER: _________________ (Assigned by Policy Manual Editor)
1. Purpose
This policy and its procedures set forth the guidelines for departments to follow when selling
goods or services to the general public at the University.
2. Policy
a. The sale of goods or services must be consistent with the University's mission and the
normal activities of the college or department.
b. The general public may not be charged at a rate less than that charged to internal users,
but they may be charged at a higher rate.
c. When selling goods or services to the general public, individuals are required to follow
the procedures set forth below to adhere to proper accounting and payables reporting, as
well as sales tax requirements.
d. Questions regarding the sale of goods or services to the general public should be directed
to the Accounts Payable Office.
3. Procedures
a. If items are purchased for the sole purpose of selling to the general public (i.e. resale
purposes), a Cash Index (336xxx) and Account Code (755018) should be used when
paying the vendor for the goods.
b. Any funds collected from the sale of the goods or services should be deposited to the
same Cash Index (336xxx) used for the purchase of the items being sold. An appropriate
revenue Account Code (50xxxx) for sales revenue and Account Code 500760 for the
amount of sales tax collected should also be used.
c. Any net fundraising proceeds paid to a recipient should be paid from the same Cash
Index and Revenue Account Code used when making the deposit. The revenue account
will be debited and offset the revenue collected. This can be done by Journal Voucher (if
to a University entity) or by a Direct Pay document (if to a non-University entity). To
document the entire transaction, a copy of the vendor’s invoice as well as a copy of the
Goods or Services Sold to the General Public
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deposit should be attached.
i. If sales are made for awareness purposes only and not for a fundraiser, this step
should be excluded, and the appropriate revenue Account Code for the items sold
should be used (e.g. for clothing sales, use 500634). The fundraising revenue
account code 500687 cannot be used for awareness purposes.
d. Sales to the general public under this policy are subject to sales tax. Options for
collecting sales tax are as follows:
i. Pay the sales tax directly to the initial vendor at the time the goods are purchased.
This will slightly understate the sales tax collection, as sales tax is normally on
the sales price which is marked up from cost. However, if it is a one-time
fundraiser, this will be allowed.
ii. Include the sales tax in the sale price of the item (sale price includes tax).
iii. Add the correct amount of tax to the sale price of the item and collect from
customers.
e. Sales tax collected must be remitted to the South Dakota Department of Revenue.
i. Departments who have a resale license and remit sales to the Department of
Revenue should add these sales and remit the correct amount of tax.
ii. Departments who do not have their own license should submit a report of their
total gross receipts and the amount of sales tax collected to the Accounts Payable
Office by the fifth (5th) of the following month.
4. Responsible Administrator
The Vice President for Finance and Business, or designee, is responsible for the annual and ad
hoc review of this policy and its procedures. The University President is responsible for approval
of this policy.
SOURCE: Approved by President on (date)__________.
Goods or Services Sold to the General Public
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NOTE: The signatures below are required for policy and procedure approval; however, signatures will
not be included in the published version of the Policy and Procedure Manual.
Recommended by:
______________________
_______________
Janet Peterson
Date
Accounts Payable Manager
South Dakota State University
Legal Review by:
_______________________
_______________
Tracy A. Greene
Date
University Counsel
South Dakota State University
Attested by:
______________________
_______________
Wesley G. Tschetter
Date
V.P. for Finance and Business/CFO
South Dakota State University
______________________
_______________
Laurie Stenberg Nichols, Ph.D. Date
Provost and V.P. for Academic Affairs
South Dakota State University
Approved by:
______________________
_______________
David L. Chicoine, Ph.D.
Date
President
South Dakota State University
Goods or Services Sold to the General Public
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