Contracted Personal Services
Including Consultants, Speakers, and Other Services
1
Contracted Personal Services
Presenters
Presented by:
Jacque Allbright
Introductions
Director of Purchasing
Marcy Young
Employee vs.
Independent
Contractor
Tax Specialist, Office of
Payroll and Tax Compliance
Jackie Price or
Marketa Willis
Vendor Maintenance
Accounting Clerk II,
FI Master Data Center
Jacque Allbright
Purchase Requisitions
& Contracts
Director of Purchasing
Yolanda Strey
HUB
HUB Specialist, Contract
Compliance
Linda Clark
Payment Vouchers &
Invoices
Accountant III, Accounts
Payable
2
Outline
1.
Introduction – Jacque Allbright
2.
Case Study 1 - (JA)
3.
Contracted Personal Services and Independent Contractors - Marcy Young
4.
Case Study 2 – (MY)
5.
Vendor Maintenance – Jackie Price or Marketa Willis
6.
Case Study 3 – (JP or MW)
BREAK (after an hour)–
7.
Purchase Requisitions and Contracts – J Allbright
8.
HUB Specialist – Yolanda Strey
9.
Case Study 4 – (YS)
10.
Payables – Paying Contractors and Other Types of Payments – Linda Clark
11.
Case Study 5 – (LC)
12.
Paying Foreign Visitors & Other Tax Issues – Marcy Young
13.
Questions & Answers
14.
Evaluations
3
Introduction
Jacque Allbright
Director of Purchasing
4
 Round of introductions: introduce speakers and participants
 Our Goals with this workshop:

To recognize the importance of communication – between
Financial Services & various departments on campus.

To work together as a team.

To keep up with the changes at the university, its policies and
state & federal regulations.

To discover and solve problems.

To allow you to participate, ask questions and discuss.
5
“Warm Up” - Case Study 1
The Physics Department at Texas State is hosting a five day research
conference at the San Marcos Embassy Suites and you are the
Administrative Assistant. Your assignment is as follows:
 Hire two well known lecturers,
 Mark Zoloft, Physics professor from the University of Colorado. Pay
him $5,000 for three one-hour lectures.
 Emily Anode, Physics professor from MIT. Pay her $7,500 for a 2 day
workshop.
 Pay Lawrence Gant, Texas State Mathematics professor, $1,000 for a onehour lecture, and
 Pay a student worker, Mary Jean Jones, currently working for the
Mathematics department 15 hours a week, to work at the registration table
for the first weekend at $10/hour.
The Account Manager wonders if the department can pay each of these persons as
independent contractors. What do you think? Here are the facts (following slide):
6
Case Study 1 - Challenges
 Both Mark Zoloft ($5,000) and Emily Anode ($7,500) will be new vendors
for Texas State. Which of the following do they need?
• FS-06
form - Employee vs. Independent Contractor Determination
• FS-01
form - Vendor Maintenance form
• Contract
• FS-03
and Purchase Order
form - Contracted Services Payment Voucher
 Lawrence Gant is a Mathematics Professor at Texas State for the Math
department. He will be speaking at the Physics conference during hours
that he is not teaching classes at Texas State. Can he be paid as an
independent contractor?
 Can the student worker, Mary Jean Jones, who is working at another
department, be paid as an independent contractor?
7
Case Study 1 - Answers
Name
Forms
Brief description of process:
Mr. Zoloft and
Ms. Anode
FS-06 form
Account manager submits one form for each
person to Tax Specialist for approval
(Employee vs.
Independent Contractor
Determination form)
FS-01 form (Vendor Maint form)
Contract and PO
- (FS-04 Contracted
Services Agreement)
FS-03 form or
Invoice – (Contr.
Services Payment
Voucher) or Vendor Inv
Lawrence Gant
PCR
Each vendor completes the form online, prints,
and signs, and sends to FIMDC.
Each vendor needs a contract and purchase
requisition because pmts are $5K or >.
Complete form for each vendor payment,
Account Mgr signs and asks vendor to sign.
Submits to Tax Specialist.
Another assignment is created, and he is paid
as per course lecturer (Consult with Faculty
Records & UPPS 04.04.12)
Mary Jean
Jones
PCR
Another assignment is created, and she is paid
hourly rate. (Consult with Career Services)
8
Contracted Personal Services
Marcy Young, Tax Specialist
9
Types of Contracted Personal Services
Academic Services -
Artists, entertainers, lecturers, speakers, and
other service providers.
Professional Services - Accountants, architects, surveyors,
medical providers, engineers, etc.
Consulting Services -
A consultant studies or advises a State
agency.
(Texas Government Code § 2254)
10
Employee vs. Independent Contractor
 An independent contractor:
a)
Works independently and is not working under supervision of
university personnel.
b)
Is working on a task by task basis with a beginning and end
date.
c)
Operates their own business as a sole proprietor.
d)
Offers similar services to the public.
e)
Is professionally certified or has specific expertise for the
project.
(Not limited to these definitions)
11
Form FS-06 – Employee vs. Independent
Contractor Determination form

T:\TAX SPECIALIST ARCHIVE FILES\CONTRACTED SERVICES\MEETING JUNE 2\Form+FS-06+Rev+062911x.pdf
12
Case Study 2
The History Department at Texas State is having a Texas Music
History concert, and you are the Administrative Assistant.
They want to hire several local well-known musicians to perform at the
concert.
They are catering dinner for performers and VIP staff, and
They want to give an award to a faculty member.
Payment Amounts:
Jimi Jones ($2,000), Janis Butler ($2,000), Elvis Brown ($2,000)
Caterer: Johnny B. Good BBQ ($900)
Award to: Ella Fitzgerald Hughes, Music professor at Texas State ($100)
13
Case Study 2 - Challenges:
1)
You have researched SAP and found that:
•
Jimi Jones is a new vendor.
•
Janis Butler was setup as a vendor last year. Should you worry about her address and
banking information being different now?
•
Elvis Brown was setup as a vendor 4 years ago. Should you worry about his address
and banking information being different now?
•
The caterer Johnny B. Good BBQ is a new vendor. (Another question: does the
caterer need to be on the approved caterer’s list?)
•
Ella F. Hughes is a Music professor at Texas State.
2)
The musicians all request to be paid on the night of performance ($2,000 each). Do we need
a contract or a purchase order?
3)
Do we need a contract or purchase order for the caterer ($900)?
4)
What kind of form is needed for payment?
5)
Can we just cut Ella F. Hughes a check through A/P ($100 award)?
14
Case Study 2 - Correct Answers:
1 New vendors
.
Jimi Jones, musician
JBG Barbeque, caterer
a) Employee vs. Independent Contractor Determination
(Form FS-06)
b) Vendor Maintenance Form – (Form FS-01)
Existing
vendors
Janis Butler, musician
c) Contact Ms. Butler. Her record is less than 2 years, but
check to see if address and banking information are the
same. If so, no action is needed.
Elvis Brown, musician
d) Contact Mr. Brown. Ask him to complete a new Form FS01 because his record is 2 years old or more.
Dr. Ella F. Hughes
e) She is in the Human Resources database, so no action is
needed for setup.
2 Contracts:
. Special
Payment
Request
Jimi Jones, musician
Janis Butler, musician
Elvis Brown, musician
Contracts (Form FS-04) - A separate agreement is needed
with each of the musicians because they request special
payment terms. The vendor’s own contracts may be
submitted if approved. Purchase orders are not needed
because the amounts (cumulative for the fiscal year) are less
than $5,000.
3 No Contract:
. Payment less
than $5,000
JBG BBQ, caterer
Neither a contract nor a purchase order is needed with the
caterer because the cumulative amount for the fiscal year is
less than $5,000.
4 Payment
. vouchers
Musicians: Jimi Jones,
Janis Butler, Elvis Brown,
and Caterer: JBG BBQ
Submit a Contracted Services Payment Voucher (Form FS03) for each of the 3 musicians and the caterer.
5 PCR
.
Dr. Ella F. Hughes
Submit a PCR to pay the faculty award.
Faculty
15
Vendor Maintenance:
Jackie Price, Acct Clerk II, FI Master Data Center
or
Marketa Willis, Acct Clerk II, FI Master Data Center
16
Is the vendor in our system and is information
current? Or is this a new vendor?
 Existing vendor:

The Account Manager and/or the Administrative Assistant will review the
existing vendor file in SAP, and confirm the information listed with the
vendor. If the vendor has moved or changed banks, the Vendor completes
a new Form FS-01, Vendor Maintenance form.
 New vendor:

The Account Manager asks the vendor to complete a Form FS-01, Vendor
Maintenance form.
 Instructions for the vendor:

The vendor prints, signs, and sends to the FI Master Data Center via fax or
mail. Form FS-01, Vendor Maintenance form includes the W-9 information.
17
Vendor Information
 Due to the confidential nature of the vendor maintenance
form the departments should not receive or keep a copy of
the form.
 Allow time for information to be verified and entered into our
system.
 Contact FI Master Data Center for assistance. – (Jackie
Price, jp54, or Marketa Willis, mw34)
 http://www.txstate.edu/gao/fimd/forms
18
Are vendors required to provide social
security number? (Privacy Act of 1974)
 Yes - According to the Privacy Act of 1974 an individual is not
legally compelled to provide Social Security number -- unless
involved in a transaction in which the IRS requires notification.
If we pay a contractor, we need to have a taxpayer number on
file.
 We retain the taxpayer number in our files for identification
purposes, and because the IRS requires a W-9 of all vendors.
The Vendor Maintenance form is a substitute W-9 under IRS
guidelines. The VMR form is only kept on file by the FI Master
Data Center and is secure information.
19
Case Study 3
Archaeology is having a seminar in September 2011, and wants to invite
two well known scientists from outside the university to speak. You are the
Administrative Assistant assigned to the project. They want to pay each as
independent contractors as follows:
 Dr. Tremblar Bunian ($20,000) in two payments, the first payment due
upon signing the contract, the second payment paid within 30 days after
the seminar.
 Dr. Rachel Darknells ($10,000) one time payment, to be paid within 30
days after the seminar.
20
Case Study 3 - Challenges
You have researched SAP and found that:
 Dr. Tremblar Bunian is a new vendor for Texas State. (He will be paid
$10,000 on signing contract, and $10,000 on completion.)
 Dr. Rachel Darknells is an existing vendor. She was entered into the
system 4 years ago, and has been paid every year for the same
conference. (She will be paid $10,000 on completion.)
 How do you set up / maintain the vendor records?
 Do you need a contract & purchase order for these payments?
 How do you submit the payment vouchers?
21
Case Study 3 - Answers
Dr. Tremblar
Bunian
Dr. Rachel
Darknells
Form FS-06
Submit to the Tax Specialist, and wait for approval.
Form FS-01
Completed by vendor, submit to FIMDC
Form FS-04
(Contracted Services
Agreement)
needed with the deposit requirement included in the contract
language, signed by both parties, submitted with purchase
requisition.
Purchase Order
Purchase requisition and purchase order needed
Vendor Invoice
Vendor invoice is needed for each payment request. Stipulate
the date due for the deposit. Include the PO# on the invoice and
have account manager sign. Submit to Accounts Payable.
FS-06 not needed
If previously approved as a vendor, and an FS-06 is on file.
Form FS-01 not
needed
unless information has changed. Contact Dr. Darknells to confirm
current address and banking information.
Form FS-04 (Contr.
Services Agreement)
Contracted Services Agreement needed.
Purchase Order
Purchase requisition and purchase order needed
Vendor Invoice
Vendor invoice is needed for the payment request. Include the
PO# on the invoice & have account manager sign. Submit to A/P.
22
Create a Contract and a Purchase Ordera
Contract and a Purchase Order
Jacque Allbright, Director of Purchasing
23
Information Regarding All Service Contracts or
Agreements
 If UPPS 05.02.02 “Texas State Purchasing Policy” requires
competitive solicitation to be done to select the best value
contractor prior to contract execution, a “good faith effort” is
required to include “historically underutilized businesses” or
“HUB’s” in the solicitation of bids, quotes, proposals or other
expressions of interest.
24
Information Regarding All Service Contracts or
Agreements

If a contractor submits to Texas State their own contract boilerplate,
or requires additional terms and conditions be added to Texas
State’s boilerplate, the contract must be reviewed by the
university’s legal counsel or the Texas State University System
Office Attorney prior to being signed by a Texas State authorized
contracting officer.
25
University Policy and Procedure Statements
03.04.07 “Interagency or Interlocal Cooperation Contracts or Agreements”.

Special process for contracts between state agencies or local governments.
03.04.04 “Processing, Approving and Executing Contracts, Purchases, and
Agreements”

Process for getting approval of most university contracts
03.04.02 “Contracting Authority”

All contracts must be signed by an authorized Texas State contracting
officer or authorized designate.
03.04.01 “Contracted Services and Consultants, Speakers and other
Services”

This policy covers contracted personal services.
26
When is a Contract and Purchase Order Required?
A Contract & a Purchase Order Is Not Required when:
 Paying a one time payment of less than $5,000.
A Contract & a Purchase Order Is Required if:
 Paying $5,000 or more to a vendor. But also if making several
payments to a vendor, which will cumulatively amount to $5,000 or
more during the fiscal year.
A Contract Only is Required if:
 When paying less than $5,000, and special payment arrangements are
requested by the vendor, or travel is included. For instance, if
someone is paid a deposit in advance, or several payments are to be
made to the vendor, or travel is included, a written agreement
(contract) is required.
27
A Contract Is……
 An agreement between the university and an outside
vendor:

Describes the work to be performed.

Describes the expectations of both parties.

Has an amount to pay, terms of payment, and a “not to exceed”
amount.

Has a beginning and ending date.

A contract puts a verbal agreement into writing.
Review Contracted Services Agreement (FS-04)
http://www.txstate.edu/payroll/taxspec/forms.html
28
Purchase Order
 Create Purchase Order through the SAP Requisition system. You
must already have a vendor number, and a fully executed contract.
 The purchase order should match the “not to exceed” amount on
the contract. This amount can be estimated, and increased or
closed out.
 Contact the Purchasing Office if you need assistance.
 Jacque Allbright, ja14, Priscilla Hernandez, ph23, Velia Espinoza,
ve01
29
Case Study 4
The Education Department at Texas State wants to pay 4 different persons for
a special project that will be completed in 3 months. Each month will have a
certain milestone completion date, and the contractors will be paid on that date
if they have completed the work. The first milestone date is 8/15, the second is
9/15 and the third is 10/15. You are the Administrative Assistant. How will you
process these payments?
Bob Roberts, project manager - $2500 for each milestone completion.
Assam Scribe, specialist - $3000 for each milestone completion.
Anita House, writer - $5000 for the entire project, in three payments.
Veri M. Portain, graduate assistant for the Education Department, will be
doing data entry at her current rate of $15 per hour data entry.
30
Case Study 4 - Challenges
Bob Roberts, project manager, is a new vendor.
 He will be paid $2500 for each milestone completion. Since there are 3
milestones, the total he will be paid if he successfully completes his work is
$7500. Does he need a contract? A purchase order? When do you turn in
the invoice?
Assam Scribe, specialist, is an existing vendor.
 He will be paid $3000 for each milestone’s successful completion, totaling
$9,000.00. Does he need a contract? A purchase order? When do you turn
in the invoice?
Anita House, writer, is an existing vendor.
 She will be paid in three payments of $1,666.67, not to exceed $5,000. Does
she need a contract? A purchase order? When do you turn in the invoice?
Veri M. Portain, data entry is a graduate assistant
 She is being currently paid through Payroll, and is working for the same
department. Can she be paid as an independent contractor?
31
Case Study 4 - Answers
Mr. Roberts
(new vendor)
Form FS-06
Submit to the Tax Specialist, and wait for approval.
Form FS-01
Completed by vendor, submit to FIMDC
Mr. Scribe and
FS-06 not
needed
If previously approved as a vendor, and an FS-06 is on file.
Form FS-01
not needed
unless information has changed. Contact each vendor to
confirm current address and banking information.
Form FS-04
(Contracted
Services
Agreement)
Contract needed - with the milestones and requirements for
successful completion included with the contract, or as an
attached Addendum. Signed by both parties, submitted with
purchase requisition.
Purchase
Order
Purchase requisition and purchase order needed because the
total to be paid will be equal to or greater than $5,000.
Vendor
Invoice
Vendor invoice is needed for each payment request. Include
the PO# on the invoice and have account manager sign. Submit
to Accounts Payable. The invoice should be submitted after
completion of each milestone.
Payroll
She will submit her hours as usual, since she is a graduate
assistant in the same department.
Ms. House
Mr. Roberts,
Mr. Scribe and
Ms. House
Ms. Portain
32
Texas Statewide Historically Underutilized
Business (HUB) Program
Yolanda Strey
HUB Specialist, Contract Compliance
33
Case Study 5
Grant Participants
The Astronomy Department has an NSF grant which provides for
award payments to all grant participants. This program is a direct
benefit to the university.
 There are 25 grant participants who will be paid $150 each.
What is the best process to pay them?
34
Case Study 5 - Challenges
Grant Participants
Some of the grant participants are existing vendors.
Some of them are new vendors.
Which forms should be used?
FS-06 - Employee vs. Independent Contractor form
FS-01 - Vendor Maintenance form
FS-04 - Contracted Services Agreement
FS-03 – Contracted Services Payment voucher
AP-2 – Grant Participant form
35
Case Study 5 - Answers
Form FS-06
Not needed. Grant participants do not need to complete form FS06 - Employee vs. Independent Contractor form, because they are
not being paid as independent contractors.
Form FS-01
Needed for new vendors. Completed by vendor, submit to FIMDC
Needed for existing vendors if information has changed. Contact
each vendor to confirm current address and banking information.
Form FS-04 (Contracted
Services Agreement)
Not needed.
Purchase Order
Not needed.
Form FS-03 (Contracted
Services Payment Voucher)
Not needed, use AP-2, Grant Participant Stipend form instead.
AP-2 Form
(Grant Participant Stipend
form)
The grant participant form must include the pages from the grant
that stipulate the type of payment and amount to be paid. All
participants can be listed on one form with separate vendor
numbers and payment amounts.
36
How to Process the Payment
Linda Clark
Accountant III, Accounts Payable
37
\
Accounts Payable webpage:
http://www.txstate.edu/gao/ap/
Accounts Payable forms page:
http://www.txstate.edu/gao/ap/forms.html
Travel office:
http://www.txstate.edu/gao/ap/travel/
38
Payment Voucher Review
The Accounts Payable office audits each payment voucher or invoice prior to
payment. If any information is incomplete or appears incorrect, payment is
withheld until information is corrected.
Review each voucher prior to submitting to assure that information is
complete and correct:
 Vendor Name & vendor number
 Description: Describe work that has been completed.
 Performance Dates- Payment cannot be paid until performance end date.
Exception – deposit required by contract.
 Vendor signature, unless vendor’s invoice is attached.
 Amount to pay
 Fund and cost center, or purchase order number
 Signature of Account Manager
39
Payment Voucher Review
 Contact Information: Provide the contact information for the Administrative
Assistant, or the person working on the documents. This is our contact for
questions.
 Advance Payment or Deposit Request: If the vendor requires advance
payment, or a deposit, or a check to be presented on the night of
performance, a written agreement (contract) is necessary. Advance
payments or check pickup must be approved by Asst Dir of Accounting Accounts Payable (Sergio Rey).
40
Texas Prompt Payment Law
\
Texas Prompt Payment Law
 Interest must be paid for invoices older than 30 days – turn in
Payment Vouchers or vendor invoices promptly.
 The earliest date stamp on the payment voucher is used to
comply with the “Prompt Payment” state law.
41
Payment Voucher as a Substitute Invoice
 The Contracted Services Payment Voucher (Form FS-03) is considered a
substitute invoice. When the department wants to pay for services, but
the vendor being paid does not issue an invoice, form FS-03 is used.
 If there is a purchase order, the vendor’s invoice alone can be used.
Write the purchase order number on the invoice, and have it approved
by the Account Manager with signature.
 If the department attaches the vendor’s invoice to form FS-03 (when
there is no purchase order), all information on the invoice must match
the payment voucher.
42
Possible Reasons for Processing Delay

New vendor – must be set up in SAP system

Vendor information is incorrect

Vendor is on “State Hold”

Vendor is or was an employee of TS < the past 12 months

Signatures or information missing

Purchase order or contract needed

Approval of OSP is needed for grants

Foreign vendor

Future performance date
43
Gifts or Awards

Payments for Gifts. Payment for small gifts for retirees, speakers, etc
can be processed through A/P.

The value of a gift may be taxable to an employee, depending on the
amount and the type of award.

Cash awards are taxable. For employees – use a PCR. For students,
or other non-employees, use the AP-1 form.

Gift Cards. Small value gift cards can be purchased as an incentive
for Human Subject Research studies or for student incentive
programs. Otherwise, gift cards are not allowed.

Reimbursement of gift certificates or gift cards purchased with
personal funds or personal credit cards is prohibited.
UPPS 03.01.03 - “Purchase of Food, Refreshments…Achievement Awards”
http://www.txstate.edu/effective/upps/upps-03-01-03.html
44
Travel reimbursements to contractors –
 Most independent contractors pay their own travel.
 Under certain circumstances, travel expenses can be included with a
contract agreement with a vendor. This is usually the case for
conferences held at Texas State, or payments to nonresident aliens.
Under the Accountable Plan:

Without Receipts : Travel expenses will be coded as part of the
contractor’s fee if travel receipts are not included with the payment
voucher.

With Receipts: Travel will be coded as 725100, Independent
Contractor travel.

Business Purpose: Travel reimbursement requests must state the
university business purposes and must benefit the university.

Travel reimbursement to a contractor, when paid, must be included in
contract agreement. (Contract Form FS-04, Part II-C.)
45
Case Study 6
The School of Journalism at Texas State held their annual
Spanish Documentary Film Festival, Punta de Vista a month ago.
They want to award two nonresident aliens as the winners of
best documentary film.
How do they begin?
One time payment to each person:
 Juan Luis Montego, citizen of Bolivia, First Place ($1,000),
 Viviana Chaco, Second Place ($500)
46
Case Study 6 - Challenges
 Juan Luis Montego is a citizen of Bolivia and is a J-1
student studying at University of Texas in Austin. He
created the film in Bolivia. (First place, $1,000)
 Viviana Chaco is a citizen of Argentina, and she came to
Texas State to participate in the film festival on a B1 visitor
visa. (Second place, $500)
47
Case Study 6 - Answers
Foreign National
Information Form
Ask each nonresident alien to complete this
form before they come to Texas State, and
return it to the Tax Specialist. It can be
emailed, mailed or faxed.
Mr. Montego
only
DS-2019
Ask the J-1 scholar to send his DS-2019 form
to the Tax Specialist. This will allow the T.S.
to ask permission of the sponsor.
Mr. Montego
Setup meeting with Tax
Specialist
Arrange for a meeting with the nonresident
alien(s) and the Tax Specialist so that the T.S.
can copy the necessary documents.
Form FS-01
Needed for each, assuming each
nonresident alien is a new vendor.
Completed by vendor, submit to FIMDC
Form FS-03 (Contracted
Services Payment Voucher)
Needed. Complete this form for each
award. 30% withholding may be required.
Form FS-06
Not needed.
Form FS-04 (Contracted
Services Agreement)
Not needed.
Purchase Order
Not needed.
Mr. Montego
and Ms. Chaco
and Ms. Chaco:
Forms not
needed:
48
Nonresident Alien Tax Issues
Marcy Young
Tax Specialist, Office of Payroll & Tax Compliance
49
Paying Nonresident Aliens through Contracted
Services
B1/B2 Visa, Business/tourist visa. INS honorarium rules:


Can only perform services at university for 9 days or less
Can only have received payment from 5 other institutions within
6 month prior period.
Travel: Nonresident aliens may be paid or reimbursed for
travel without tax if they provide receipts.
J1 Visa: Nonresident aliens with a J1 visa sponsored by
another institution can be paid if permission is granted in
writing by sponsor. (Need DS-2019 form to find sponsor’s RO)
NRA Staff or Faculty:

Nonresident aliens who are hired as employees by Texas State
University are paid through payroll only.
50
Forms for Nonresident Aliens:
One-time payments
to NRA visitors to
Texas State:
Foreign National Information
Form (FS-05)
NRA completes online, sends to T.S. via
fax, mail or email.
Setup Meeting with Tax
Specialist and NRA
When the NRA comes to campus, he/she
meets with Tax Specialist.
Vendor Maintenance Form
(FS-01)
Vendor completes form, prints and sends
directly to FI Master Data Center.
Contracted Services
Payment Voucher (FS-03) –
Account Manager and vendor complete
form and send to Tax Specialist.
J1 sponsored by
another university –
need DS-2019
Send DS-2019 to T.S. so that T.S. can
request permission from sponsor to
pay the NRA.
NRA Staff or Faculty
Employee Packet, meet with
Payroll NRA Specialist, PCR
NRA must have original I-9, W4, copy of
DS-2019.
Workshop: Payment Requirements for
International Employees and Independent
Contractors
This is a workshop to be held September 13th &
14th at Texas State. It is sponsored by the
International Office.
51
http://www.txstate.edu/payroll/taxspec/forms.html
Tax Withholding and Tax Treaties
Call Tax Specialist when planning for a foreign visitor
 Tax Withholding - NRAs have tax withheld at 30% from honoraria paid,
unless there is a tax treaty. Travel expenses paid with receipts are not
taxable, therefore no tax is withheld.
 Tax Treaties – With a tax treaty, no tax need be withheld, however, the
Tax Specialist must apply for a taxpayer number (ITIN) and tax treaty
exemption. Get paperwork signed while visitor is on campus. This
process may take up to 30 days.
 Certification of Original Passport and Visa – The Tax Specialist must
see the original passport and visa or have a notarized copy on file, and
complete a certification form for the IRS.
 Vendor Maintenance form – The Tax Specialist reviews all new
vendors who are NRA or a foreign corporations.
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Summary
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Forms
FS-06 - Independent Contractor
FS-03 - Contracted Services Payment
Determination
Voucher
FS-01 - Vendor Maintenance form
FS-05 - Foreign National Information
FS-02 – Vendor Maintenance form
for staff & faculty
FS-04 - Contracted Services
Agreement (a.k.a.
University contract)
• FS-04-A – Addendum to
Contract
•
FS-04-B – Addendum for
Intellectual Property
Form
AP-1 –
Texas State Payment Request
form
AP-02 – Grant Stipend form
AP-9 – Student Organization Payment
Request form
AP-10 – Agency Account Payment
Request form
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Where to Route Forms

Employee vs. Independent Contractor Form (FS-06)
Send to Tax Specialist.

Vendor Maintenance Form (FS-01) – Vendor completes form
online, prints and sends directly to FI Master Data Center.

Contracted Services Payment Voucher (FS-03) and
 Contracted Services Agreement (FS-04)
 Send contract and payment vouchers to Tax Specialist. (Send only
one original copy of payment voucher!)

SAP Purchase Requisition – Account Manager creates PO in SAP
Requisition system.
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Review process
Tax Specialist
Payments to foreign persons
Travel for independent contractors
Contracts and payment vouchers for non-major
contracts for services.
OSP and Tax Specialist
Payments for subcontractors under grant
Travel Office
Travel for employees or grant participants
Accounts Payable –
(AP-1 form)
Payment Vouchers, Prizes to students (cash not
required to be spent on education)
Financial Aid
Educational Awards and Scholarships to Students
Contract Compliance
Major contracted services (> $100,000)
Consulting services under Texas definition(>
$25,000)
Purchasing
Major Contracts, Purchase of products, furniture
Human Resources,
Payroll
Gifts or Awards to Employees
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Other Tax Needs
 University’s W-9 – Contact Tax Specialist
 University’s Tax Exempt Status – Contact Tax Specialist
 Hotel Tax Exemption – Available for University employees only
– See Travel Website
 Sales Tax Exemption – Available for University business related
purchases – Tax Specialist website
 Research on tax issues – Contact Tax Specialist
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Closing…
 Please complete the evaluation forms for
us.
 Thank you to all the presenters and
participants!
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