SOFO Updates
Illinois Sales Tax Exemption
Exemption from Illinois sales tax is a privilege that student organizations can use by way of their status as a Registered Student Organization at Northwestern. However, it is important to understand that this exemption is not absolute. Student organizations may not use the University’s sales tax exemption for merchandise meant to generate revenue. For example, a group may use the sales tax exemption for t-shirts it purchases for its members. But it may not use the exemption for t-shirts the group intends to sell.
As per the University's Sales Tax Exemption Update from December 3, 2021, the use of the University's sales tax exemption in purchases involving the use of personal funds for organizational purposes has been limited by the State of Illinois. In addition to being restricted to under $400.00, now two documents are required for presentation to a vendor:
- Employee Certification Form provided upon request from procurement@northwestern.edu. Note that all the information listed in the update is required, including the name and NetID of the individual who will make the purchase.
- One-Time Use Sales Tax Exemption Letter obtained from the SOFO Service Counter upon presentation of the certification form.
Account Application Renewals Delayed Until FY24
Signature Cards
In-Person Voucher Submissions.
Quarterly Account Reconciliations
Beginning winter quarter, student officers will need to submit their reconciliations at the end of each quarter. They will not be able to submit any transactions the following term until the reconciliation is completed for the previous one. Student groups should not engage in financial activity if their accounts are frozen or if they have not met the reconciliation requirement for the quarter.
Individual Student Group SOFO Listservs
Outstanding Checks Report
Payee Status
Non-Resident Payees
Payments to non-residents who would perform outside of a U.S. territory (e.g., virtually) requires a different payment process and additional approvals from multiple University departments.
Because of these many requirements, payments to non-residents must be completed by the appropriate University department. As this is the case, student organizations are prohibited from issuing gift cards to non-residents. If this should happen inadvertently, non-resident payees are expected to reimburse the value of the gift cards to the student group so that the prescribed process may be followed.
Invitation to non-U.S. Citizens or Permanent Residents Not on U.S. Soil
Gifts Cards
SOFO’s gift card policy was reviewed and re-approved last year by Tax and Regulatory Services. It is the current policy for student organizations that work with SOFO. As of this writing, a first discussion was initiated to review the University’s broader gift card policy. SOFO will modify its policy, if necessary, once a new University policy is established.
It is important to note that though the University does not outwardly prohibit the use of gift cards (with non-resident payments being an exception), central administrative departments do advise against using them because of the considerable auditing requirements. Because gift cards represent transfers of cash, or anonymous payments, and therefore earnings for the recipient, it is recommended that groups acquire merchandise of nominal value and relevant to the activity, to give out as incentives/prizes instead. But here too, if student groups equate the greater value of the merchandise with the greater possibility of drawing people for a successful event, similar reporting requirements may kick in. For merchandise distributed as prizes, we were informed that the fair market value of merchandise may require tracking so that if an IRS threshold is reached, the University would be required to include the value in its 1099 reporting to the IRS.
Student Organizations, PCI-DSS Compliance, and Online Sales
Treasury Operations has informed SOFO that all student organizations that wish to conduct payment transactions online (where a student group is the vendor/seller) must use payment card processing platforms that have been vetted and approved by the University before any transactions can take place.
Tax and Regulatory Services has also indicated that such online activity will likely also place sales tax collection and reporting requirements on the group. Other activities that could activate this requirement are sales to non-NU populations.
Student Group Donations to and Fundraising for External Charitable Organizations
The ability to donate from a student club’s fund is limited by the origin of the funds. Funds that are self-generated may be donable if approved by Financial Operations using the current Request to Donate/Fundraise form and process. But funds received from the University or donated to the student organization cannot be donated externally. A beneficiary organization must be an active 501(c)(3) and not be involved in activities that the University itself is restricted from doing—such as lobbying or campaigning for candidates.
Use of Charitable Gifts and CATalyzer Funds
Gifts to student organizations has been a topic of extended discussion that has resulted in some guidance being generated within the past year. Gifts received by the University of $10,000.00 or more, over a prescribed time, require the creation of a gift account for the student group, to be managed by its advocate authority (the department that approved its formation or requested that a SOFO account be created for it). While SOFO has created subaccounts specifically to hold gifts processed through the University for student organizations, it does not accept them directly, but by transfer from established University gift accounts. There are, however, restrictions on the amount that can be transferred to SOFO and how it can be used. The limit is generally $2,500.00 but can be more if departmental approval is received. From the guidance, we see that some expenditures must be performed directly from a gift account, rather than the group’s SOFO.
Student groups should be aware that any equipment purchased with donations are considered University property and must be regularly tracked, maintained, and documented as such by a University employee.
Use of donated funds for student group-sponsored competitions must be approved by Gift Accounting before payments can be issued to the prize recipients. A review for approval requires a statement from the student group describing in detail how the competition is conducted, who the participants are (NU students and/or others with their affiliations), who is involved in determining the prize recipients, and what criteria are used.
Because of the restrictions placed on charitable gifts, some student groups have inquired about refunding them to the original donors. This runs counter to the IRS definition of a charitable gift--donors have been recorded as such and provided a donation receipt. SOFO was informed that the only reason to refund a charitable gift would be if the student group no longer exists or if the group is involved in activities that are restricted to the University.
Financial Support Page for Student Organizations
In light of the restrictions on donated funds, the Norris Box Office is testing a financial support page on its NBO ticketing website. The web page is meant as a vehicle for family and friends to provide financial support that does not require or qualify for University tax receipts.
It is important to note that language matters in this case. These are NOT donations nor contributions (and should not be referred to as such) and would not fall under IRS-specific requirements for use of gifts. Supporters who would use the page must be clear that no tax receipt will be forthcoming. So it is important that student groups not use the legally restrictive terms to request support.
Ordering from Amazon and Other Preferred Vendors
The process for ordering through Amazon (and other NU preferred vendors) will be different in fall quarter. As Amazon is available to Northwestern faculty and staff through their iBuyNU system login, advisors will need to login as shoppers, create carts, and assign them for further processing. Login access to iBuyNU is only available for NU faculty and staff. Student groups will then need to submit their fully approved voucher and supporting documents to SOFO, where it will be matched to the cart to complete the order.
Communication with Procurement and Payment Services (PPS) will be essential as advisors may need to request some items be unblocked or alternate preferred vendors located. PPS has announced that it will no longer allow personal addresses to be added to the NU Financials Ship-To file. Any exception request to add a new Ship-To address must be submitted by the advisor directly to PPS. A PPS approval will result in a new Ship-To code that will need to also be communicated to SOFO.
Procurement Card Transactions
As University or NU Financials transactions, procurement card payments will always post to the -50 University Charges line regardless of what is written on the voucher. If the organization does not have a -50 line, the charges will be posted to the General Funds line.
Student Organization Use of Northwestern Trademarks
Use of Northwestern logos and images came up last year. Please know that even if you have incorporated “NU” or “Northwestern” into your group name, you are not authorized to use them in any design you create for your group and wish to publish or print (e.g., a design for t-shirts). Care should also be taken with the use of “Northwestern University” in your communications, as student groups are not authorized to speak on behalf of the University, or imply that their activities align with the University’s mission, or are sanctioned by the institution.
Student Organizations Involved with Political Awareness
- REQUEST: Please internally review the policy on . Pages 3 through 6 of that policy are clear and direct.
- This policy is based on IRS requirements. Engaging in these prohibited activities has wide-ranging consequences, including jeopardizing the University’s 501(c)(3) charitable status.
- It is a reasonable assumption that use of Northwestern’s digital/virtual resources, such as Zoom or similar license, can be included in this policy.