In compliance with Federal and State regulations the University has several reporting responsibilities and may require additional forms and information before making a payment. For example:
The W9 form is an IRS form and is a request for the tax ID, tax status and address of a payee. All individuals and companies providing services to the University are required to complete a Form W-9.
The purchaser is responsible for obtaining the Form W-9 from the vendor and submitting the form to Accounts Payable in the Controller's Office (on the Loyola Law School campus the forms must be submitted to the Fiscal Affairs office).
The purpose of this form is to claim exemption from the 7% California state tax withholding. CA Form 590 should be obtained from all individuals and companies who are non-residents of California and are providing services in the state of California. Please note that not all payees will qualify for the exemption and therefore it is not mandatory for the payee to complete the CA Form 590. LMU is required to withhold 7% of payments to these vendors for state income tax unless a valid 590 is on file. The first $1,500 in each calendar year is exempt from this tax. CA Form 590 can be found at the MyLMU website as well as in the forms section of the State of California Franchise Tax Board website.
The purchaser is responsible for obtaining the CA Form 590 from the vendor and submitting it to Accounts Payable in the Controller's Office (on the Loyola Law School campus the forms must be submitted to the Fiscal Affairs office).
LMU is required to report on any payment made to foreign individuals or entities that provide service to the University. The University uses compliance software called Glacier to determine if any part of the payment requires tax withholding. There are special rules for payments to nonresident aliens that are governed by the IRS. If applicable the non-resident will be issued a 1042-S at the end of the calendar year. Assistance with filing tax returns is provided by the Controller's Office for foreign students and staff.
If an LMU employee is planning to pay a foreign individual or entity he or she should contact the Accounts Payable office and provide name and email address of the payee. The link to Glacier will be sent to the payee at the email address provided. Please see the Loyola Marymount University Payments Made to Nonresident Aliens Procedure Manual for a complete discussion.
The 1099 is an IRS tax form issued to individuals/companies to report income for the calendar year. The 1099 recipients are usually those who provide services to the University, are not on the University payroll, and have not been on payroll within the current calendar year.
When hiring an Independent Contractor, the Independent Contractor Checklist should be completed to ensure that the individual qualifies for independent contractor status. A 1099 form will be issued for all payments in excess of $599.00 in a calendar year.
Sales and Use Tax
The University is required to pay California sales tax on tangible goods purchased in California and a use tax on tangible goods purchased from outside the state. The sales and/or use tax amount should be included on all purchase orders. Accounts Payable will impute the current Sales or Use tax in the County of Los Angeles on all invoices not including these taxes, and the tax will be added to the invoice total. Questions regarding the application and exception of sales and use tax should be directed to the Controller's Office.