How to handle tax on mixed receipts

[ulmo]

I know that policy is that personal items not be purchased on the same receipt as items for church use that members wish to be reimbursed for. However, sometimes we get receipts where the member didn't follow that policy, which makes the tax a bit tricky.

In both of the cases I'm looking at today the member either didn't include the full amount of the portion of the tax that was for the reimbursable item, or calculated it based on an incorrect tax rate (I think they increased the sales tax rate in the last few years and the member used the old rate).

My question is, when a member does this and the portion of the tax for the reimbursable items on the receipt is other than what the member put on their reimbursement form, how should I handle it? The store will round up (I'm assuming) to the nearest cent, but In most cases calculating the tax on one item out of several will not come out even and I'd hate to either rob the Lord (even if it's less than a penny) or rob the member. In whose favor should I round, and if the member did their own calculating/rounding and ended up with a difference of a penny (or several if there were multiple receipts) from what I calculate, do I still cut them a check for the amount they wrote? I know it's splitting hairs, but in finances I'd rather be exact especially if there's a church policy of what to do in such cases, rather than just be 'pretty close'. We all know how accountants love their zeros

[jdlessley]

I have run into similar situations. I always checked the receipt against what the member listed on the reimbursement form as required by Church instructions. If the member included personal items on the same receipt as reimbursable items I insisted they identify the reimbursable items in some manner such as highlighting, underlining, or circling. I then sum the total for the receipt and then apply the tax rate. I then rounded the tax the same as the vendor/retailer does. As I recall they always rounded up, so my computations were rounded up. The result would be the same as if the member had a receipt for just the reimbursable items. Each receipt was checked and computed separately.

When the results I came up with were different from the member's computations and in favor of the member then I would adjust the amounts listed on the reimbursement form and initial the changes. If the results were less than the member claimed I would counsel with the member to resolve the difference.

The principle I operated under was that the member should be reimbursed for 100% of expenses incurred. This may result in them getting one cent additional back because of rounding for these combined personal and reimbursable expense receipts. But to me 100% reimbursement means 100% reimbursement. Additionally I also counseled members to first use a tax exempt form as much as possible and then to separate personal expenses and reimbursable expenses at the register and separate receipts whenever possible.

[Gary_Miller]

I know that policy is that personal items not be purchased on the same receipt as items for church use that members wish to be reimbursed for. However, sometimes we get receipts where the member didn't follow that policy, which makes the tax a bit tricky.

While it is good practice and preferred there is no such policy.

[Mikerowaved]

In 5 years of working with mixed receipts, I think I recall having only one or two correctly calculated by the member. Utah taxes can be especially tricky because of different tax rates for food and non-food items combined on the same ticket - and with some receipts it can take a bit of studying to decipher which rate was applied for each line item. I did the math as carefully as I could and handled discrepancies pretty much like JD explained above.