Research Corporation of the University of Hawaiʻi

Identifying the Type of Expenditure for Purposes of Determining Tax Treatment
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Entity or Individual
Ultimate Recipient
Is the ultimate recipient an entity or an individual?
Third-Party Vendor Benefit
Is the payment to a third-party vendor for the benefit of an
Yes individual (the ultimate recipient)?
Individuals Receiving Are individuals receiving:
No 1.
Services/funds/goods that are not identifiable to a specific individual, and are instead received as part of a group activity (such as beverages provided at a community meeting, or a bus ride that is open to any participant); or
Examples include:
• A payment to an airline/travel agency for a participant’s airfare; or
• A cash advance to an employee to pay research study participants; or • A payment to a store to purchase a laptop for a student.
2. Services/funds/goods for an activity that is part of an official UH course curriculum (with the activity specifically described in the class catalog), or part of the UH Chartered Student Organization?
Individual
Individual’s Performance of Service
Entity
Reimbursement on Behalf of
Recipient
Is the entity receiving a reimbursement of expenses on behalf of the entity’s employee?
Examples include:
• If the payment is to a company but a
specific individual (the ultimate recipent) was invited, then the answer is “yes”.
• If the payment is to a company and the company selected who to send, then the answer is “no”.
Individual
Expenses Only
Is the individual only being paid/reimbursed for his/her expenses (as opposed to being paid for both expenses and services, or only services)?
No
Is the individual required to perform any type of service?
For example, is the individual:
1. A consultant, professional, or other independent
contractor; or
2. Being paid an honorarium; or
3. Renting his/her real property or other property; or
4. Allowing his/her intangible property to be
licensed, distributed, and/or otherwise used; or
5. A UH/RCUH volunteer; or
6. Performing services for UH/RCUH; or
7. Performing services for his/her own employer; or
8. Invited to UH/RCUH for an interview; or
9. A guest speaker or lecturer?
* A research study/clinical trial participant being paid for his/her participation (whether in the form of cash or a
gift card) is not considered to be performing a “service”.
** If the individual is a nonresident alien and will be entering the U.S., the ability to pay the individual may depend on his/her visa status. In these cases, it is critical that the individual have the appropriate visa.
No Yes
Refer to Policy 2.006
Tax Treatment of Non-Service Financial Assistance for Individuals
No
Yes
Tangibles
Is the payment for tangible merchandise / items?
No Yes
Yes
Entity or Individual
Are you paying an entity or an individual?
Entity
No
Yes
Refer to Policy 2.007
Tax Treatment of Compensation (Services, Rents, and Royalties)
Refer to Policy 2.008
Tax Treatment of Business Expenses (Service-Related)
Refer to Policy 2.009 Tax Treatment of Goods
Refer to Policy 2.010
Tax Treatment of Program Expenses