Integrated CSU Administrative Manual

CSU POLICY

Section:   CSU POLICY MANUAL FOR CONTRACTING & PROCUREMENT

Section 5000 Policies

Policy Number:  5214.0

Policy Title: Tax-Exempt Financed Acquisitions

Policy Effective Date:  March 12, 2002

Last Revision Date:  
(see revision history)

POLICY OBJECTIVE

This policy articulates the CSU’s requirements related to tax-exempt financed acquisitions to ensure procurement and contracting activities are in compliance with applicable regulations.

POLICY STATEMENT

Acquisitions that involve tax-exempt provisions (lease/purchase or installment payment agreements) must follow all of the general rules and principles of procurement as stated in ICSUAM 5000 Series policies.

Such acquisitions are also subject to additional requirements which assure compliance with federal tax code provisions. Financed acquisitions are identified as tax-exempt whenever the seller/lessor or third party financier intends to claim the interest portion of its proceeds as exempt from federal income tax.
Procedural questions for developing such transactions can be directed to the Contract Services and Procurement Department (CS&P) at the Chancellor's Office. Helpful information for the development of contracts that provide for a financed tax-exempt acquisition can be found on the CS&P Internet website.

Fully developed contracts or purchase orders containing the tax-exempt provisions must be submitted, along with all their related financial documentation, to the Finance and Treasury at the Chancellor's Office for review and approval prior to execution.

The Chancellor's Office shall be responsible for maintaining records to ensure that financiers who issue tax-exempt obligations on behalf of the CSU comply with federal tax reporting obligations. The Chancellor's Office shall also maintain pre-negotiated terms and conditions with selected financiers, provide model agreements, and coordinate efforts to obtain legal counsel on tax-exempt.

 

APPLICABILITY AND AREAS OF RESPONSIBILITY

 

REVISION HISTORY

  • January 31, 2014 (Annual Review conducted with no change to policy.)

RESOURCES AND REFERENCE MATERIALS

Useful Guidelines:

 

Related Principles:

 

Sound Business Practices:

 

Laws, State Codes, Regulations and Mandates:

Reference: Education Code 89036, P.C.C. 12113, E.O. 775

COGNIZANT OFFICE(S)

CO Manager:

Tom Roberts
Director, Contract Services & Procurement
CSU Office of the Chancellor
troberts@calstate.edu

Subject Expert:

Tom Roberts
Director, Contract Services & Procurement
CSU Office of the Chancellor
troberts@calstate.edu

Affinity Group:

Procurement and Support Services Officers

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