| TO: | Procurement Card Holders |
| FROM: | Charles M. Peccolo,
Jr. Vice President and Treasurer |
| DATE: | August 26, 2005 |
| SUBJECT: | Prohibited Tennessee Sales Tax and PayPal Charges |
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This
is a reminder that the university, as an instrumentality of the state, is
exempt from paying Tennessee sales tax on purchases of university goods and
services. Recent monthly reviews of procurement card transactions continue
to reveal the payment of Tennessee sales tax. Cardholders must make a positive
effort to avoid paying state sales tax. The university’s tax-exempt number
is printed on each procurement card and can be referenced conveniently to
substantiate the university’s exempt status.
Also, PayPal purchases are prohibited with the procurement card, as noted in a February 3, 2005, e-mail from Neal Wormsley. The monthly review indicates that some cardholders are making such purchases on a continuing basis. PayPal purchases have been identified as a potential risk to the university because of PayPal’s requirement that users spending a certain amount must secure their PayPal account with a bank account. It is not appropriate for the university’s bank account to be referenced, nor do I suspect that cardholders wish to provide their personal bank account information to satisfy this requirement. Therefore, PayPal purchases are prohibited. I appreciate your continued cooperation with the procurement card program. If you have questions about procurement cards, please feel free to contact my office or Audit and Consulting Services. Thank you. |
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