When purchasing equipment with a value of $5,000 or more, there are things to take into consideration to ensure you are processing your order in compliance.
When Does Capital Equipment Apply?
The department makes a determination that the purchase is capital equipment. Verify that the equipment has a normal life expectancy of more than one year, and is not expendable. Non-expendable means that the equipment is not consumed by its use.
Verify that the capitalized cost will exceed $5,000. The $5,000 value includes the price of the equipment and other costs needed to put the equipment into service such as required installation services, startup components, accessories, startup kits (e.g. regents), freight, handling and sales tax.
Establish the purchase requirements, e.g. installation, warranty, accessories, special training, start-up kit, etc.
Things I Need to Know or Do
If a trade-in is part of the purchase (determined by the department), the Department Asset Custodian must approve the release of the trade-in before the requisition is submitted. Then, establish the price for trade-in and arrangements for the supplier to receive or pick up the product.
In the BearBuy cart, after completing the Capital Equipment form, specify the asset management codes, including the Custody Code (obtained from the Department Asset Custodian). Navigate to the Asset Management tab. Input the Custody Code and Asset Location. Input the Tag Number ONLY if the purchase is adding to the value of an existing piece of equipment.
Through 2030, California Department of Tax and Fee Administration's Regulation 1525.4 – Manufacturing and Research and Development Equipment allows “partial sales and use tax exemption” on certain manufacturing and research and development equipment purchases and leases. If your purchase qualifies, complete the required Partial Exemption Certificate for Manufacturing, Research and Development Equipment (CDTFA-230-M)and attach to your order. For more information, visit our California Partial Sales and Use Tax Exemption page.
BearBuy Form to Use
Capital Equipment Form
Other Useful References
- Supply Chain Management Buying Capital Equipment web page
- UCSF's Controller's Office Capital Asset Management Guide
- A-51, Application of Proceeds from the Sale, Trade-in, or Transfer of University Property
- Partial Exemption Certificate for Manufacturing, Research and Development Equipment
- CA Partial Sales Tax Exemption Job Aid
Related Policy
Version Date: May 2018