Sales Tax Overview

Sales Tax Overview

The Sales Tax Overview is a resource for you and your business.

The following is a generic discussion of sales taxes and your responsibility with regard to sales tax collection, etc.

The rules may vary from state to state. This discussion is intended to give you’re an overview. After reading be sure and check with your state’s sales tax authority to see how their rules apply to you. They are generally very helpful and will provide you with both online and printed information to help you understand your responsibilities.

  • Unless you sell something for more than the suggested retail price, you have no responsibility for collecting and paying sales taxes.

  • If you do sell a product for more than the suggested retail price you may be responsible for collecting and paying sales tax on the difference between the suggested retail price and your sales price.

  • When dealing with Business Support Materials I advise you to check upline to see how your organization handles sales taxes. The person who sells a product to the end user is normally the one responsible for collecting and paying the sales tax.

  • Therefore, if you sell a product to someone who is going to resell it to someone else, you are not responsible for collecting the sales tax.

  • If this is the case you should get and maintain in your files a “resale certificate” from this person or entity.

  • A “resale certificate” is your purchaser’s representation that they intend to resell the product and therefore collect and pay the sales tax.

  • You can obtain blank resale certificates from your own sales tax authority.

  • IRS and state certified non-profit entities, churches, charities, and etc. generally are not subject to sales tax. Therefore you will not be responsible for collecting sales taxes from them.You should ask for evidence of the non-profit status and also get and maintain an “exemption certificate” from the entity. An “exemption certificate” is your customer’s representation that they are a non-profit entity and not subject to sales taxes.

  • You may also get blank exemption certificates from your state taxing authority.

  • Another circumstance when you will not be responsible for collecting sales taxes is when you ship the product out of state. This is an area you should discuss with your own state taxing authority.

  • To get started contact your state sales tax authority to obtain a sales tax permit as well as blank resale and exemption certificates.

  • You should review any online and printed materials your state makes available. So clear up any questions you have when applying for your sales tax permit.

  • Go online to: for access to contact information for all fifty states.