All purchase of gift cards/gift certificates (of non-negotiable amounts) must have a valid, documented business purpose as outlined in the policies referenced below, and must comply with all University purchasing and expense procedures.
Gift Cards payment methods:
P-card: The preferred method for purchasing gift cards is to use a University-issued Purchasing Card (p-card). The purchase must be within the P-Card limits and not conflict with any contractual agreement.
- Gift cards are considered cash equivalents by the IRS. Separately submit UP 602.11 Appendix B, Reportable Gifts, Awards, & Prizes Documentation Form, to the Tax Office within two (2) weeks if:
- The recipient is an employee (regardless of amount), or
- The recipient is a non-employee and the amount is $600 or greater.
- Note that some vendors/retailers will not accept credit cards to purchase gift cards.
DPR: You may also submit a Direct Pay Request (DPR). Download a DPR form and complete according to the form instructions (link provided below).
- Attach UP 602.11 Appendix B, Reportable Gifts, Awards, & Prizes Documentation Form, to the DPR if:
- The recipient is an employee (regardless of amount), or
- The recipient is a non-employee and the is $600 or greater.
- Reimbursement for purchases for others: If an individual purchases gift cards to distribute to others and requests reimbursement and the gifts meet the reportable limits, UP 602.11 Appendix B - Reportable Gifts, Awards, & Prizes Form must be submitted. If the gifts do not meet the reportable limits, a list of recipients must be sent with the DPR to be reimbursable to the individual tax-free, in accordance with the University’s accountable plan.
Any non-reportable gifts (see UP 602.11 Appendix A) should be tracked on UP 602.11 Appendix C, Gifts, Awards, & Prizes Log Sheet, or a similar tracking sheet unless it is unreasonable or impractical to do so.
Gift Certificates payment methods:
The following criteria must be met for gift certificates to be considered tangible personal property (and not cash). The gift certificate must:
- Be non-transferable,
- Be able to be used to purchase tangible personal property only, from a limited array of such items pre-selected or pre-approved by the University, and
- Be non-negotiable and non-refundable (not allow cash back).
Thus, gift certificates given to employees that meet the criteria listed above and are below the thresholds listed in UP 602.11 Appendix A are not reportable to the Tax Office.
To create and use gift certificates at the University’s Barnes & Noble Bookstore (located in the Popp Martin Student Union):
Departments/Units will create a gift certificate using the Barnes & Noble Bookstore Gift Certificate Webform.
Be prepared with the recipient’s name, desired amount, date, expiration date, fund number to charge, and responsible department’s name. Also provide the recipient type: employee or non-employee.
Gift certificates to employees will be charged to account 950150; gift certificates to non-employees will be charged to 951440.
Note that the department will not be charged for the gift certificate expense until it is actually redeemed by the recipient.
Once the webform is submitted by the requestor, they will receive an email containing the gift certificate they created.
Ensure all of the information entered is written accurately on the gift certificate.
Print one copy of the original gift certificate pdf to give to the recipient (to reduce risk, do not print more than one copy, do not forward the gift certificate, and do not save the gift certificate to a hard drive, thumb drive, etc.)
To use the gift certificate, the recipient must present the gift certificate to the bookstore cashier upon checkout, and present a photo ID. If the cashier is unfamiliar with the procedure, ask for the store manager. Upon use, the fund number listed on the gift certificate will be charged up to the approved amount. If the full amount of the gift certificate is not used upon the first visit, it can be used for a future bookstore purchase until the gift certificate amount is reached or has expired.
Applicable University Policies:
- Review University Policy 602.11, Gifts, Awards, and Prizes, before making any gift card or gift certificate purchases.
- Refer to UP 602.11 Appendix A to determine if a gift (cumulative per person) is reportable to the Tax Office.
- Refer to University Policy 601.8, Appropriate Use of University Funds, and related standards to determine permissible fund types for these purchases.
Tax reporting requirements by recipient type:
- Employees: If a gift card of any amount is given to an employee, the Tax Office must be notified for reporting on the employee’s Form W-2. In addition, the payment will be subject to federal and state income taxes. Gift certificates that meet the criteria listed above are subject to the non-cash awards and gifts limits listed in UP 602.11 Appendix A.
- Non-employees: If combined payments to a non-employee total $600 or greater in a calendar year, the Tax Office must be notified for Form 1099 reporting.
- Foreign nationals: Prior to making a payment of any amount to a foreign national/non-U.S. resident, contact the Tax Office, as tax reporting and withholding are required.
Units may purchase advance quantities of gift certificates and cards as long as the following controls are established with respect to the quantity of gift certificates and cards purchased:
- There are appropriate controls to ensure that all pre-purchased gift certificates and cards are kept in a secure place.
- Records documenting the use of the gift certificates and cards that include the recipient's’ information and the gift certificate or card number or other similar identification number are maintained.
- Units purchase only the number of gift certificates and cards expected to be awarded during a fiscal year.
- Gift certificates and cards with a value greater than the tax reportable limits specified in Policy 602.11 may not be purchased without advanced written approval from the Tax Office. Advanced approval must be requested via e-mail or hard copy memo submitted to the Tax Office.
|Policies||Standards||Forms / Links|
Contact for additional questions:
Please refer to the contacts listed on the Tax Office website.
Last revised: 5/11/2018, 7/10/2018, 9/14/18