Does anyone have any information/expertise on buying materials with a state sales tax exemption?
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Varies a lot by state. Talk to the state revinooers to get the basics for your state, then talk to suppliers to see how they like to handle it.
I've sold people stuff a couple of times that were tax exempt for one reason or another. All we did was get their tax ID number and give that to the accountant.
I have no idea what was done from there.
I think I have lived in one state where you had to pay a use tax instead of a sales tax when you build a new one, works out to same thing
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As you already heard, it varies by state. In CT contractors don't get any tax exemption at all as far as I know.
PaulB
at one time around here, The material had to go from supplier to job site. could not go to ware house, office , or pick up . It had to be delievered from supplier to jobsite.
You don't expect the tax laws to make sense, I hope?
I buy all my materials without tax, but charge my customer the tax. The suppliers are required to keep a resale certificate on file for me (and others). It's all tied to my state business license number.
For subcontractors I use, I am required to keep a resale cert. on file for them.
WA state.
http://grungefm.com
Do you do remodeling or new construction? I am wondering if full time builders pay sales tax on materials, or do they just pay taxes on the property when it sells.
here TN everyone pays sales tax on everything 9.25% except if you are tax exempt... buy'n it for resale... a non profit, church ect...not for use in a product that will be sold... all materials that go into a house or building are taxed... then when that house sells... it's taxed again...
but we have no state income tax... guess it all balances out... with the huge underground economy (all cash) then at least those that would pay zero pay a little... the downside is that it hits the poorest the worst...
I hate buy'n 20k in materials and see'n 2k in sales tax on the invoice...
p
What does resale mean if not that you're using the material to make a new item of tangible personal property for sale? It's surprising to hear that a contractor would pay sales tax when purchasing material, then charge the customer sales tax when selling the house. Yow! Hopefully you guys have great schools and roads.
Here in WA I pay no sales tax on materials I buy for my jobs. I charge the customer 7.7% sales tax on the entire amount of the job. I file my business ID number with all of my vendors and that's it. If I buy something that is not for resale, but no tax is charged (example: something from an out of state internet vendor) I have to declare the purchase and pay the tax on my return. They also get 1/2 of 1% of my gross as "business and occupations" tax.
if it's for resale... in it's exact state... ie buy'n wholesale and sell'n retail ... if i purchase 100 2x4 s and resell them as 2x4's then i pay no tax on the purchase but collect it on the sale... if i take same 2x4s and build a wall with em... they are no longer 2x4s but a wall... i now pay sales tax on the 2xs at purchase and then i collect sales tax on the built wall... go figure...
what i don't know is... we have several auto plants in this state no way can they be paying sales tax on each part of the car... but then they prob never actually "purchase anything in TN " prob just shipped here and put together... who knows...
p
Ha... the automakers... I guarantee that your governor and his/her entourage of economic development specialists flew to their headquarters in Detroit or Tokyo and gave them big-#### tax breaks to locate the plant there. Part of that means no problemo con el sales tax... we got yer back... it's all good.
Do you do remodeling or new construction? I am wondering if full time builders pay sales tax on materials, or do they just pay taxes on the property when it sells.
Sorry for the long delay in response, but I am a remodeling contractor and rarely step foot on a new construction site. Lucky me!!
http://grungefm.com
I'm in Kansas. Schools here are exempt from paying sales tax. I did a job for a school where they gave me a certifcate of some sort to prove I was buying material for an exempt job.
Your suppliers or the people you work for might know.
You probably won't know until you ask someone in the state and then you'll be really confused.:)
Did KS use to charge sale tax on remodels, but not new construction or vice versa.I on the MO side, so that I see KS news, but don't pay that much attention to all of the details.
About fifteen years ago, I started my handyman business and asked my lawyer about sales tax.As long as I paid the tax at the supplier, I didn't need to collect anything for material from the customer. I also didn't need to charge tax for my labor. I haven't worried about it since then.Just out of curiousity, I looked on the KS Dept. of Revenue website."Original Construction" is not taxed on labor. At a glance, it looks like OC is residential work , new or remodel, and new construction on non residential work. It also looks like it could be really confusing to tell what might be new construction on non-residential.Since I do residential and work for tax exempt entities,it looks like the old advice from my lawyer still holds. I used to be blissfully ignorant and now I am confused.:)I bet the line between KCMO and KCKS creates alot of tax headaches.