Procurement Announcements

Nov222024

Important Update: Reduced R&D Sales Tax Rate for Equipment Purchases
The UC system has reached its limit for the qualified Research & Development (R&D) tax rate discount. Moving forward, qualified equipment purchase orders (POs) issued through December 31, 2024, will be processed without the reduced tax rate.

UCSC Procurement strongly encourages researchers to delay new equipment purchases eligible for the reduced R&D sales tax rate until January 2025, when the partial exemption resets.

Background:
California’s partial sales and use tax exemption (“partial exemption”) for purchases of qualified R&D tangible personal property has a limit of $200 million in qualifying purchases per calendar year for the entire University of California system. Unfortunately, this limit has been reached for 2024. As a result:​

• The reduced R&D sales tax rate of 5.8125% cannot be applied to any additional qualified equipment purchases or leases in 2024.
• All remaining 2024 equipment transactions will be subject to the standard sales tax rate.

​​More information about the program can be found on the California Department of Tax and Fee Administration website.

​Exceptions:
Orders issued before this announcement that qualify for the reduced rate and have already been processed will be honored.

If delaying your purchase until January 2025 is not feasible or you have urgent needs, please consult UCSC Procurement at strategicsourcing@ucsc.edu​.​