Research Corporation of the University of Hawaiʻi

Research Corporation
of the University of Hawai‘i
2.009 Tax Treatment of Goods
I. Payments for Goods
This policy addresses payments for goods only. Refer to Policy 2.007 Tax Treatment of Compensation (Services, Rents, and Royalties) when paying an accompanying services agreement or installation agreement.
“Goods” is a general term for tangible merchandise. A payment for goods is generally not income that is subject to tax reporting or tax withholding with the following exception:
A. Non-qualified scholarship/fellowship expenses for goods are considered income to the recipients.
1. For U.S. citizen, permanent resident alien, and resident alien recipients, it is not required that the payment/reimbursement be reported on an IRS Form 1099- Misc.
2. For nonresident alien recipients, the payment/reimbursement is subject to tax withholding and tax reporting if it is U.S. source income. Refer to Policy 2.006 Tax Treatment of Non-Service Financial Assistance for Individuals (Section II.A.3.c.iii, Tax Treatment of Non-Qualified Scholarships/Fellowships – Nonresident Aliens, for a more detailed explanation.
II. Relevant Documents
Policy 2.006 Tax Treatment of Non-Service Financial Assistance for Individuals Policy 2.007 Tax Treatment of Compensation (Services, Rents, and Royalties)
Date Revised: 2/02/2017