California State University, Sacramento

Tax Compliance

California State University Sacramento is committed to ensuring compliance with Internal Revenue Code and California tax laws. This commitment is necessary to achieve proper tax withholding and reporting. Failure by the University to withhold and report as required can lead to fines and penalties for the University.
 

Topics

Nonresident Alien Taxation

California State University Sacramento makes payments to individuals who are residents of a foreign country. Most of these individuals are considered nonresident aliens by the Internal Revenue Service (IRS). The University may be required to withhold income tax and file reports with the IRS and the Franchise Tax Board. These payments include employee compensation (students, faculty, and staff), scholarships and fellowships, travel reimbursements, guest lecture fees, stipends, prizes/awards/gifts, living allowances, payments to performers/entertainers, and independent contractors. Please contact the appropriate department prior to making payments to nonresident aliens.

Taxable Employee Benefits

Certain benefits provided to employees may be subject to taxation. An employee benefit is any property, service, or cash compensation provided to an employee in connection with the performance of services for the University. Benefits provided to employees are normally taxable as wages. This includes awards, gifts, certain meal reimbursements, and housing and vehicle allowances. The value of these benefits must be communicated to Payroll Services so that applicable taxes can be withheld.

Unrelated Business Income Tax

As a government entity, the California State University is not required to file federal or state income tax returns. Payments made to the CSU by businesses are not reported unless subject to unrelated business income tax (UBIT). The University is not taxed on any income that results from activities that are substantially related to its mission or make an important contribution to the accomplishment of its mission. The University’s mission encompasses teaching, research and public service. However, the University must pay taxes on income received from activities not directly related to the University's mission. This can include income from advertising, and renting of University facilities. Please contact Stewart McConnell to discuss implications of tax liability.

The items presented here are for general information only and do not constitute tax advice. The University does not endorse nor independently confirm the information presented in any other website referred to in this document. The University encourages users of this page to seek qualified tax counsel when appropriate.

California State University, Sacramento

Administration & Business Affairs
6000 J Street, Sacramento Hall 272
Sacramento, CA  95819-6038
(916) 278-6312

Updated June 2004