Equipment purchased with VBRI funds are property of VBRI and will be classified according to the depreciation policy as defined below.
In addition, the acquisition of any equipment requiring space, utilities or other resources not available in the investigator’s assigned research space must be reviewed by VANJHCS R&D administration prior to placement of the order. Equipment to be purchased as part of an educational activity must be explicitly included in the proposal as approved by the EC.
Investigators should advise VBRI of any equipment purchase prior to placing the order to assure sufficient funds are available. Note that VBRI is not exempt from New Jersey state sales tax and the appropriate amount must be included in your cost estimate.
Equipment Inventory and Depreciation
- Durable, non-expendable items with an acquisition cost of $5,000 or more with a useful life of more than a year will be considered equipment. All such equipment, including furniture, purchased at $5,000 or more will be VBRI property and listed as a fixed asset.
- GAAP (Generally Accepted Accounting Principles) require that such fixed assets be depreciated over a reasonable term or the estimated useful life. Therefore, fixed assets will be depreciated using the straight-line method at a term set uniformly at five (5) years.
- The equipment or furniture listed as part of the Institute’s fixed assets will be affixed with an VBRI property tag and tracked biennially for location and condition.
- The acquisition cost will include all reasonable components that allow the equipment to function. The acquisition date will be the date of the invoice.
- Durable items (equipment/furniture/computer systems) purchased with VBRI funds for greater than $2,500 will be listed on the VBRI inventory and affixed with an VBRI property tag in order to maintain an inventory record.
- These inventory items will be tracked annually for location or status, but will not be depreciated as fixed assets by VBRI.
- Individual components purchased for $2,500 or more and added to an existing computer system will be tagged as VBRI inventory, if reasonable to do so.
- A durable item purchased for less than $2,500 will not be tagged or listed as inventory.
If an investigator transfers an active research project to another 501(c)(3) research institution, s/he may direct a request to the Board of Trustees to transfer fixed assets or inventory items purchased with VBRI funds.
An investigator may request VBRI-purchased items be donated to VANJHCS for research support, except for equipment purchased with Federal Funds.
Payment for durable items listed as equipment or inventory must be requested on an Check Request Form. Section 10 “Equipment/Capital Goods” must be completed on this form when submitted for reimbursement or payment.
Durable items ordered through VBRI will ordinarily be delivered to VANJHCS and will be subject to acceptance based on available facilities and safety policy.
High Technology Sales/Use Tax Deferral
VBRI has received a certificate from the state allowing sales/use tax deferral for qualified machinery and equipment for the year starting 9/10/2004 awarded November 30, 2004 under RCW 82.63.
To excerpt from the state documentation:
- Qualified machinery and equipment includes machinery and equipment that are an integral and necessary part of a pilot scale manufacturing or qualified research and development operation. The equipment is to be used exclusively for or in support of qualified research and development or pilot scale manufacturing.
- Taxes are deferred under this program if the business uses the investment project for qualified research and development or pilot scale manufacturing during the year in which the investment is certified as operationally complete, and the next seven calendar years.
The equipment must be > $5,000 and be expected to last for 8 years. Tax is deferred in increments over the minimal 8 year life of the equipment. Therefore, if the tangible item does not last for 8 years, sales/use tax will be owed proportional to the remaining years. That is, if the equipment last 6 years, 2/8 of the total sales tax will be owed to the state. The amount deferred annually will need to be tracked for all qualifying equipment.
VBRI funds may be used to purchase desktop and notebook computers for use in or support of VA-approved research. Purchase in support of an educational activity must be within the scope of the proposal as approved by the Education Committee for all education activities.
VA purchased computers/ laptops are defined as any computers purchased with VBRI funds and must have completed a form for “Personal Equipment put in VA use at the convenience of the user”.
All computers purchased must be shipped to the VBRI Office c/o the investigator. Once received the equipment must be tagged by IRM with the appropriate VA form completed as above before it is released for use. Computers that will be accessing the VA network will be encrypted by IRM.
Any questions concerning this procedure please contact the Executive Director and the President.
Notebook computers require a specific rationale for purchase that explains the need for a laptop.
Computers purchased with VBRI funds may in turn be donated to the VA for use unless this is specifically forbidden by the sponsor. Forms for this donation would indicate “equipment put in VA use” on the VBRI website. Specifically, this can not apply for items purchased with Federal Funds.
VBRI funds may not be used for the purchase of cell phone equipment unless specifically approved by the Board of Directors. In general it is not allowed.
Other specialty devices or electronic items such as digital cameras may have a valid research rationale, but due to the potential personal use should be pre-approved before purchase and with written justification.
After 5 years, if equipment is obsolete, it must be turned into VBRI for disposal, or for large equipment disposal must be arranged. For equipment purchased with federal funds, disposition must be arranged with the sponsor. If the equipment has a hard drive, it will be removed and turned in to IRM. Exceptions include where the PI can continue to make use of the equipment beyond the 5 year period.