A recent performance audit examined whether Weber State University Campus Stores abused state sales tax by allowing tax-exempt sales of computers and educational software to Weber State University students, costing the state of Utah an estimated $167,353 lost revenue in sales taxes.
The findings came from A Performance Audit Of Higher Education’s Competition With The Private Sector to the Utah Legislature, investigating the sales of goods to the public by WSU, the University of Utah and Utah State University, determining whether the universities were in violation of their 501c(3) (tax-exempt) status. It focused mainly on the U’s new Red Zone stores, Rice-Eccles Stadium, the University Guest House and Conference Center on the U campus, the University Inn in Logan, and the University Conference Center at USU.
The legislative auditor’s report looked at several issues, including WSU allowing students to buy computers tax-free. All college bookstores in the state offer textbooks tax-free, but WSU Campus Stores looked at the law and realized it could sell other items to students tax-free under the law. Campus Stores began offering Apple computers tax-free to students who have taken a class within one academic year, said public relations director Allison Hess.
This audit confirms that WSU is well within the spirit and letter of the law concerning its sale of Apple computers and sales tax collection on textbooks, instructional supplies, required course material and computers, Hess said.
“Weber State will always operate within the law, but wants to take advantage of an exemption that is a significant help to Weber State students,” Hess said. “The trend is clear: Students need more than textbooks for their educational success. The current Weber State policy reflects the requirements of students now and in the future.”
Quoting directly from the report, “Utah State Tax Commission officials told legislative auditors that WSU does not need to collect tax on sales of items directly related to its 501c(3) status.” Furthermore, “Mission-based activities could arguably be interpreted very broadly.”
Many WSU students benefit from the university’s decision to sell Apple computer tax-free.
“I bought a Mac computer when I first started going to WSU and I saved about $150, because I did not have to pay any taxes,” said Zach Otero, a WSU digital media communications major.
The report also confirmed that “neither Weber State University nor other college and university bookstores appear to be selling academically priced Apple computers to the public.” WSU will continue selling Apple computers tax-free for now. However, some from the U and USU are pushing the Board of Regents to update and clarify its policies.
“In 2013 and beyond, students require technology to succeed in every aspect of their educational journey. From admission to graduation . . . technology is a required educational tool,” Hess said. “Exempting sales tax for students provides them a much-needed and appreciated break.”