Category: Uncategorized

Do Not Forget Tax Deductions!

A lot of small businesses lose unneeded money because they do not understand how much they can save on smart tax deductions.

Cellphones

You can deduct your percentage of business use from your cell phone bill on your taxes. For example, if you use 30 percent of your personal cell phone for business, then you can deduct 30 percent of the bill. 

You can also just purchase a cell phone that will just be used for business purposes.

Equipment and Furniture

Section 179 is a tax law that allows business owners to deduct the full purchase price of qualified equipment from their gross income. Rather than deducting a certain percentage of the equipment under a multi-year depreciation schedule, as is customarily done, business owners can deduct the full price, as long as it is under$2.5 million if it was financed or purchased in 2018.

Qualified assets for Section 179 include:

•    Machines or equipment purchased for business use.
•    Office furniture.
•    SUVs, pickups, and vans weighing more than 6,000 pounds.
•    Certain improvements to the interior of commercial property.

Read our handy article Tax Deductions that Every Small Business Owner Should Know to find out about more money-saving tax deductions.

Insurance

A self-employed person can deduct the premium of various types of business insurance. This can include:

• Fire
• Theft
• Worker’s Compensation
• General Liability

Vehicle Expenses

So, if a self-employed person uses their vehicle for 100 percent business use and the vehicle is in the company’s name, then the car or truck is fully deductible.

If the vehicle is in your personal name and used partly for personal, partly for business use, then there are two ways to calculate the deductions

Track your actual car expenses, including gas, maintenance, insurance, and depreciation, and deduct a percentage supported by the number of business miles you drive.

Deduct a typical rate on each “business” mile driven for the year. For 2020, the quality mileage rate is 57.5 center per mile driven for business use, down from 58 cents per mile in 2019.

No matter which method you select, you will have to keep track of what percentage of business and private miles you drive. You can use a manual log or an online app.

Other Deductions

The following is also important:

• Travel by airplane, train, bus, or car between your home and your business destination. (If you’re provided with a ticket or you’re riding free as a result of a frequent traveler or similar program, your cost is zero.)
• Fares for taxis or other types of transportation between the airport or train station and your hotel, the hotel, and the work location, and from one customer to another, or from one place of business to another.
• Shipping of baggage, and sample or display material between your regular and temporary work locations.
• Using your car while at your business destination. You can deduct actual expenses or the standard mileage rate, as well as business-related tolls and parking fees. If you rent a car, you can deduct only the business-use portion for the expenses.
• Meals and lodging.
• Dry cleaning and laundry.
• Business calls while on your business trip. (This includes business communications by fax machine or other communication devices.)
• Tips you pay for services related to any of these expenses.
• Other similar ordinary and necessary expenses related to your business travel. (These expenses might include transportation to and from a business meal, public stenographer’s fees, computer rental fees, and operating and maintaining a house trailer.)
• Many apps have come on the market that makes it exceptionally easy to scan and track receipts for travel-related expenses. Some of these apps also automatically categorize expenses which is very nice for accurate bookkeeping.

There Are Other Taxes Besides Income Taxes

Businesses pay more than just income taxes. They include the following:

• Employment taxes on wages paid to employees and to the owner (you). 
• Social Security
• Medicare tax 
• Federal unemployment tax (FUTA)

Social Security tax is 12.4 percent of all wages paid up to $137,700, with half paid by the employee and half paid by the employer. Medicare is equal to 2.9 percent of wages paid (3.8% on wages in excess of $200,000 ($250,000 for joint returns, $125,000 for married taxpayers filing a separate return), half paid by the employee, and half paid by the employer. FUTA is generally equal to 6 percent of the first $7,000 of each employee’s wages and is paid by the employer. Self Employed owners will have to pay a total amount of Social Security taxes and Medicare taxes since there is not a separate employer to pay it for you.

Advertising

Self-Employed people should keep in mind that all advertising costs are fully tax-deductible.

This can include the following

• The cost of printing business cards, flyers, and mailers
• Social media advertising like Facebook ads
• Promotions at conventions and trade shows
• The cost of advertising agencies
• Television and radio advertising
• Employing freelancers

You can also deduct all commissions paid to non-employees for sales and marketing purposes. This can include payments to individual sales reps, or marketing channels and a platform like Amazon.

Any Labor That is Contracted

This includes all fees paid to independent contractors. If you hired a graphic designer to style a logo for you or contracted with a developer to make your website, their fees are fully tax-deductible.

If you paid a contractor $600 or more over the course of the year, you’ll even have to file Form 1099-MISC.

Getting A Tax Resale Certification Is One Of The Best Things You Can Do As An Entrepreneur

If you decide to start a business, a tax resale certificate can really save you money on taxes.

In short, a tax retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell, such as wood for a cabinet.

However, the process can be difficult and the rules are different for each state. That is why TaxResaleCertificate should do all the hard work for you. We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence. Make sure you check out our second blog in this series so you can learn even more valuable information about tax resale certificates.

Ohio Is A Great Place To Start A Business Because Of Community Support

In Ohio, small businesses can find plenty of help and support among their local communities. A reliable and professional business can easily retain and attract customers after it is established.

Overall, the people in the state want to help local businesses stay strong and thrive. They actually will seek out local businesses rather than automatically go with one that is located out of state.

There Is Great Innovation In Ohio

The small business community in Ohio has plenty of networking opportunities. Entrepreneurs can look to find plenty of support among their peers. In addition, Ohio is home to an impressive network of colleges and universities. This means that one can find many business incubators and accelerator programs throughout the state. Educational hubs are a great place to find useful resources and mentorship advice.

A Burgeoning Tech Industry

Ohio has seen an amazing surge in the tech industry. This includes everything from tiny startups to the giants of the aerospace industry. The affordability of the area is making the state very attractive to some high-level players. These large companies, in turn, help small businesses by giving them lucrative contracts. They also pay well and this will allow the community to have much more in disposable income.

The state is also going back to its roots by using technology innovations to reinvent the manufacturing industry. This will be manufacturing that is ready for the challenges of the 21st century. 

Tax Advantages

That tax structure for businesses in Ohio is very manageable. Ohio does not have any type of corporate income tax. The top marginal rate for individuals is 4.997% on income over $208,500. This means that businesses pay very little to the state after they pay their federal taxes.  However, Ohio’s sales-and-use taxes can be on the high end. Most counties in this midwestern state charge a 5.75% sales tax, and in at least one county, the rate is as high as 8%. That is why a Tax Resale Certificate is a great way for businesses to save money.

Tax Resale Certificates

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

Vendor’s License

An Ohio vendor’s license is required to pay sales tax on taxable transactions in the State of Ohio. There are different types of vendor licenses.

Type of License	Cost of License	Description	Type of Application
Vendor	$25	A person or business with a fixed place of business in Ohio from which taxable sales are made. Vendors must have one license for each fixed place of business. License is issued by the County Auditor.	ST-1 (PDF)
Transient Vendor	$25	A retailer who transports stock of goods to temporary places of business in order to make sales. The license is issued by the Department of Taxation and valid throughout the state.	ST1-T (PDF)
Out-of-State Seller	No fee	A person or business located outside of Ohio who makes retail sales of property or services for storage, use, or consumption in Ohio. The license is issued by the Department of Taxation.	UT 1000 (PDF)
Direct Pay Permit Holder	No fee	Manufacturers or other consumers who purchase tangible personal property for which the taxable status cannot be determined at the time of purchase. These consumers are authorized to make sales and use tax payments directly to the state. The license is issued by the Department of Taxation.	ST 900 (PDF)
Consumer’s Use Tax Account	No fee	Purchasers who have not paid the tax to a vendor or seller (in most cases for out-of-state transactions) make payments directly to the state. The license is issued by the Department of Taxation.

You need to make sure you have the proper vendor’s license before you can apply for an Ohio Resale Certificate.

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Doing Business In Tennessee

Entrepreneurs in Tennessee can enjoy great benefits like a low cost of living and stable economy. The fact that this state can boast of a solid quality of life at a fraction of the cost of many other places makes it attractive to small businesses.

However, the amount of construction in the bigger cities like Nashville, speak to a thriving economy that is growing at a sustainable rate. This means that the economy is relatively stable which should make entrepreneurs feel more secure about their investments. Tennessee can also boast of bustling urban centers that still retain a small hometown feel.

All this being said, one of the drawbacks of doing business in Tennessee is the high rate of taxation on sales. That is why it is smart for a business to get a tax resale certificate as soon as possible. 

Tax Resale Certificates

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits. In Tennessee this is called a Use Tax Certificate of Resale.

Tennessee Sales Tax Nexus

Tennessee requires the following:

• Economic Nexus– An out-of-state retailer generally is required to collect and remit sales tax once the retailer meets a set level of sales transactions or gross receipts activity (a threshold) within the state. No physical presence is required.

You have economic nexus in Tennessee if you have made at least a half million dollars of sales into Tennessee in the previous 12 month period. This means that you are required to collect and pay sales tax in the state regardless of whether or not you have a physical presence in Tennessee. If you need more information than look to Tenn. Comp. R. & Regs. R. 1320-05-01-.129.

Tennessee Use Tax Certificate of Resale

Generally, resale certificates are used:

• When purchasing finished items that are for resale.
• When buying materials which will become a physical part of an item that will be held for resale.
• When purchasing items which will be solely for demonstration or display while holding them for sale in the regular course of business operations.

Purchasers can not use a resale certificate when buying a product they will:

• Use rather than sell
• Use in their business before they sell it
• Use for a personal purpose
• Hold as an investment for appreciation in value and for sale in the future.

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner-Make sure the form is filled out accurately and completely 
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

 The Various State Tax Laws Can Be Confusing

Each state has its own unique tax laws related to retail sales tax that are constantly changing. There are many different definitions of what is nexus and what manner of tax resale certificates are acceptable. Some states accept resale documentation from other states, while many do not.

Third-party fulfillment companies make this even more difficult to comprehend.  A large company like Amazon can have one shipment travel through a dozen states, which can often trigger nexus.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

Do Not Get Frustrated.

We understand that this is a whirlwind of information that can be very frustrating. There are great differences between states and you do not have the time to sort this out and properly run your business. 

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just ease into our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate.  We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence. Make sure you check out our second blog in this series so you can learn even more valuable information about tax resale certificates.

Why Do Business in North Carolina?

You might be surprised to learn that North Carolina has a thriving business community that includes over 900,000 small businesses. These businesses actually employ 44% of the private labor market in the state. The cities often have business-friendly regulations and a low cost of living as one of the many perks of doing business in North Carolina.

The cost of groceries, housing, homes, utilities, and transportation are way below many other places in the United States. Entrepreneurs are also happy with this southern state’s very manageable tax code.

A Tax Resale Certificate Is A Great Way To Save On Taxes

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits. Overall, these certificates can provide great savings on sales tax.

First, You Must Get A North Carolina Tax Permit

Your business can register for a North Carolina Tax Permit online or by regular mail.

You will need the following information:

• Your Social Security Number (SSN) or Federal Employer Identification Number (FEIN), and North Carolina Secretary of State Number (SOS), if applicable
• Your business name, address, phone number
• Partner or Responsible Person, if applicable (name, title, SSN, address)
• Details about your business (begin date, type of business, etc.)

What Businesses Need To Get A Tax Permit?

The definition of sales nexus can vary greatly from state to state. Here is a list of the different ways in which states can determine sales tax nexus:

• Click-Through Nexus legislation
• Affiliate Nexus legislation
• Marketplace Nexus legislation
• Notice and Reporting Requirements
• Economic Nexus 

Click-Through Nexus legislation- This usually requires a remote seller to meet a minimum sales requirement in the state resulting from an in-state referral agent who is a resident of the state. The agent must be making commission payments to the referral agent for any sales that are the result of the click-through referrals from the agent’s website. 

Affiliate Nexus legislation– A remote retailer holds a substantial interest or is owned by a retailer that is located within the state and sells a similar type of product under a similar business name. Instate retailers can also be used to promote or market the product to in-state customers. Affiliate nexus does not require common ownership and may not include services such as sales and delivery.

Marketplace Nexus legislation– This definition applies to marketplace facilitators who operate a business in the state and provides e-commerce infrastructure, customer service, payment processing, and marketing services to individual sellers. The facilitator is the one that is required to register with the state and collect the sales tax rather than the individual sellers.

Notice and Reporting Requirements– This legislation requires that a retailer does not collect the state sales tax themselves but notify their buyers that they must report state use tax on all their purchases. The retailer might be required to send the purchaser a statement of all their purchases.

Economic Nexus– An out-of-state retailer generally is required to collect and remit sales tax once the retailer meets a set level of sales transactions or gross receipts activity (a threshold) within the state. No physical presence is required.

To find out more about state sales tax please visit the sales tax institute.

 The Various State Tax Laws Can Be Confusing

Each state has its own unique tax laws related to retail sales tax that are constantly changing. There are many different definitions of what is nexus and what manner of tax resale certificates are acceptable. Some states accept resale documentation from other states, while many do not.

Third-party fulfillment companies make this even more difficult to comprehend.  A large company like Amazon can have one shipment travel through a dozen states, which can often trigger nexus.

Remember To Verify Any Tax Resale Certificate Presented To You

A vendor can refuse any tax resale certificate.  This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Virginia Is A Fine Place To Start A Business

As one of the nation’s oldest states, Virginia is home to many lucrative industries. This state can boast of being a great center for aerospace and technology. Virginia is also home to over 20 military bases and has great proximity to the nation’s capital. The area has also been traditionally known for mining as well.

It Is A Great Place For Entrepreneurs

A giant percentage of the world’s internet traffic flows through the data centers that are located in Virginia. These giant facilities are the foundation of some of the most valuable businesses on earth, including Amazon. This means that the state is a perfect spot for anyone trying to start a web or cloud-based business. Online retail businesses are particularly lucrative and Tax Resale Certificates help these types of businesses save money.

Tax Resale Certificates

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

The Sales Tax Permit

In Virginia, you need to register for a sales tax permit before you can receive a tax resale certificate. A business needs a sales tax permit if the following is true:

The Virginia Retail Sales and Use Act establishes a tax on the sale, lease, or rental of tangible personal property or the use or consumption of tangible personal property in Virginia, as well as taxable services in Virginia.

A seller is subject to the sales tax imposed on gross receipts from retail sales. “Retail sales” means sales made for any purpose other than for resale. The tax may also apply to the furnishing of transient accommodations and the lease or rental of personal property. Code of Virginia § 58.1-603.

The seller is responsible for collecting the tax from the customer on each taxable sale. The tax must be separately stated and added to the sales price or charge. The general sales tax rate for Virginia is 5.3 percent (4.3 percent state tax and 1 percent local tax). There is an additional 0.7 percent state tax imposed in the localities that make up Northern Virginia and Hampton Roads, making the rate in these areas 6 percent (5 percent state tax and 1 percent local tax).

Using A Virginia Tax Resale Certificate

Generally, resale certificates are used:

• When purchasing finished items that are for resale.
• When buying materials which will become a physical part of an item that will be held for resale.
• When purchasing items which will be solely for demonstration or display while holding them for sale in the regular course of business operations.

Purchasers can not use a resale certificate when buying a product they will:

• Use rather than sell*,
• Use in their business before they sell it,
• Use for a personal purpose, or
• Hold as an investment for appreciation in value and for sale in the future.

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner-Make sure the Virginia ST-10 form is filled out accurately and completely 
• Online verification is not available at this time, so call 804-367-8037 to verify that the resale certificate is valid

• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Getting A Tax Resale Certification Is One Of The Best Things You Can Do As An Entrepreneur

If you decide to start a business, a tax resale certificate can really save you money on taxes.

In short, a tax retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell, such as wood for a cabinet.

However, the process can be difficult and the rules are different for each state. That is why TaxResaleCertificate should do all the hard work for you. We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence. Make sure you check out our second blog in this series so you can learn even more valuable information about tax resale certificates.

Why Register For A Tax Resale Certificate In Florida?

There are many advantages to having a tax resale certificate in the Sunshine State. First, if you have any type of retail business in Florida that sells items to consumers, you are required by state law to collect Florida Sales Tax. This will require you to register with the Florida Department of Revenue for a Florida Resale Certificate.

What Is A Florida Resale Certificate

It is critical that you understand that tax resale certificates can also be used on items that will be resold. Office supplies, such as new computers for your employees, would not fall under the category of retail. It would be considered fraud not to pay sales tax on these items. In California, the State Board of Equalization, known as the BOE or the SBE, imposes sales tax on the sale at retail of tangible personal property.

If this is confusing for you, just think of tax resale certificates as state tax exemption certificates.  Some states actually call them exemption certificates or reseller’s permits. Purchasers who are engaged within the business of selling tangible personal estate may issue resale certificates when purchasing items they’re going to sell within the regular course of their business operations. When a seller accepts a legitimate resale certificate that is presented in good faith and during the proper time period, the seller does not owe tax on that sale. CDTFA-230, General Resale Certificate, is often issued by purchasers when purchasing goods they’re going to resell within the regular course of their business operations.

Generally, resale certificates are used:

• When purchasing finished items that are for resale.
• When buying materials which will become a physical part of an item that will be held for resale.
• When purchasing items which will be solely for demonstration or display while holding them for sale in the regular course of business operations.

Purchasers can not use a resale certificate when buying a product they will:

• Use rather than sell*,
• Use in their business before they sell it,
• Use for a personal purpose, or
• Hold as an investment for appreciation in value and for sale in the future.

How Do I Know If I Need To Register For A Florida Resale Certificate?

You have to register if your business has nexus to the state.

The definition of sales nexus can vary greatly from state to state. Here is a list of the different ways in which states can determine sales tax nexus:

• Click-Through Nexus legislation
• Affiliate Nexus legislation
• Marketplace Nexus legislation
• Notice and Reporting Requirements
• Economic Nexus 

Click-Through Nexus legislation- This usually requires a remote seller to meet a minimum sales requirement in the state resulting from an in-state referral agent who is a resident of the state. The agent must be making commission payments to the referral agent for any sales that are the result of the click-through referrals from the agent’s website. 

Affiliate Nexus legislation– A remote retailer holds a substantial interest or is owned by a retailer that is located within the state and sells a similar type of product under a similar business name. Instate retailers can also be used to promote or market the product to in-state customers. Affiliate nexus does not require common ownership and may not include services such as sales and delivery.

Marketplace Nexus legislation– This definition applies to marketplace facilitators who operate a business in the state and provides e-commerce infrastructure, customer service, payment processing, and marketing services to individual sellers. The facilitator is the one that is required to register with the state and collect the sales tax rather than the individual sellers.

Notice and Reporting Requirements– This legislation requires that a retailer does not collect the state sales tax themselves but notify their buyers that they must report state use tax on all their purchases. The retailer might be required to send the purchaser a statement of all their purchases.

Economic Nexus- An out-of-state retailer generally is required to collect and remit sales tax once the retailer meets a set level of sales transactions or gross receipts activity (a threshold) within the state. No physical presence is required.

To find out more about state sales tax please visit the sales tax institute.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Pennsylvania Is A Great Place For Business

Pennsylvania is a place where the entrepreneurial spirit is alive and well. This is one of the reasons that the state can boast of several hundred thousand small businesses. Pennsylvania also did well bouncing back from the Great Recession with a fairly low unemployment rate. The state is a leader in many key industries that include aviation, technology, energy, life sciences, and film.

However, there are some challenges. Pennsylvania has one of the highest corporate income tax in the nation. This is one of the reasons that it is important to apply for a tax resale certificate in order to not pay unnecessary sales tax.

What is A Tax Resale Certificate?

It is critical that you understand that tax resale certificates can also be used on items that will be resold. Office supplies, such as new computers for your employees, would not fall under the category of retail.  It would be considered fraud not to pay sales tax on these items.

If this is confusing for you, just think of tax resale certificates as state tax exemption certificates.  Some states actually call them exemption certificates or reseller’s permits.

As a savvy business retailer, it is important that you are aware of how to utilize tax resale certificates to your best advantage. In short, a retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell such as wood for a cabinet. This is a significant saving and can save your business a ton of money if utilized properly. Our article Everything You Need to Know About Tax Resale Certificates will give you an in-depth rundown about how these types of certificates can help your business.

Unfortunately, the rules of Tax Resale Certificates can vary greatly by the state which can be very confusing. Our site makes the process as easy as possible. Just take advantage of these user-friendly options to help take the headache of applying for a tax resale certificate off your plate.

Getting Started In Pennsylvania

In order to obtain a resale certificate in Pennsylvania, one must apply for a Pennsylvania Seller’s permit. This state imposes a sales tax on “the retail sale, consumption, rental or use of tangible personal property” in the state; digital goods are included within this definition. Pennsylvania will also tax business services, particularly those that include building, repairing, and/or maintaining a taxable item.

The following are examples of items exempted from sales tax in Pennsylvania:

• Gum And Candy
• None Ready To Eat Food
• Clothing
• Sales Only For Resale

Pennsylvania Resale Certificate

After you have obtained your Pennsylvania Seller’s Permit then you can apply for a Pennsylvania Exemption Certificate or REV-1220 in order to be not charged sales tax for items that are intended to be resold.

Generally, resale certificates are used:

• When purchasing finished items that are for resale.
• When buying materials which will become a physical part of an item that will be held for resale.
• When purchasing items which will be solely for demonstration or display while holding them for sale in the regular course of business operations.

Purchasers can not use a resale certificate when buying a product they will:

• Use rather than sell
• Use in their business before they sell it
• Use for a personal purpose
• Hold as an investment for appreciation in value and for sale in the future.

If you are an out-of-state seller, you may use your state’s reseller’s permit number to buy items from Pennsylvania retailers tax-free.

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your hands.

We provide a tax resale certificate for the top states that include:

• California
• Texas
• Massachusetts
• New York
• New Jersey
• Illinois
• Florida

Let us handle the hassle so you can go about the important work of leading your retail business to great success. 

Tax Resale Certificates

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

Getting Started In Maryland

Businesses in Maryland that provide any type of taxable goods and services must first apply for a Maryland Sales Tax Permit from the Maryland Comptroller’s Office. This permit is also known as a seller’s permit, sales tax number, or sales tax license.

Is The Tax Resale Certificate The Same As A Seller’s Permit?

Even though a tax resale certificates are called reseller’s permits in some states, it is important not to confuse them with seller’s permits. A seller’s permit allows a retailer to charge tax on items that they are going to sell to a customer. A tax resale certificate allows you to buy items that are intended for resale without paying a sales tax on those items.

When Do You Need A Seller’s Permit In Maryland?

A business must register for a seller’s permit in Maryland when:

• If your business has “nexus” (significant presence in the state) such as a retail store, office, or warehouse where products are produced, stored, and/or delivered
• Craft show and fair items sold in Maryland
• You have employees (including sales representatives or agents) that are working in Maryland
• You have an online business located in Maryland that is selling taxable products to Maryland residents
• You are an out-of-state business selling to Maryland residents and one of the following:
  • Total sales of tangible personal property to Maryland residents is $100,000 or more; or
  • Physical Products

Physical Products

Almost all physical products are taxable when sold at retail in Maryland.  

These include:

• General merchandise like furniture, appliances, and clothing
• Titled or registered items like vehicles
• Some foods, medicine and medical equipment, security services, and sales of machinery and equipment used in producing goods are tax-exempt.

Often digital products are not taxable in this state.

Services

In Maryland, most services are not taxable with the following exceptions:

• Short-term lodging
• Commercial janitorial and other cleaning services

Does A Vendor Have To Accept My Tax Resale Certificate?

It is extremely important to a retailer’s bottom line that they do not pay sales taxes on goods if there is a possibility that the tax can be exempted on a state level. However, it is also crucial to understand that a wholesaler is not required to accept your tax resale certificate in some states. 

If the vendor doesn’t accept the certificate, the buyer will have to pay the sales tax on the merchandise being purchased.  In most cases, they will be able to get a credit for the sales taxes paid later on in their sales tax filing. 

Additionally, purchases under $200 may not be tax-free unless;

• Purchasing the goods by vendor credit,
• Goods that already are exempted from sales tax
• Alcoholic beverages regulated by Article 2B of the Annotated Code of Maryland

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Massachusetts Is A Great Place For New Businesses

Massachusetts is known for its healthy economic growth. This state recovered strongly from the financial crisis of 2008 and is a fantastic place for small businesses. The following reasons contribute a large part to Massachusetts’ success:

• Strong Education Systems
• The Tech Industry
• A Nurturing Community

Education

It is no secret that Massachusetts is home to some of the finest universities in the nation, including Harvard and MIT. However, these are just two of the top names of the many other colleges that also graduate a crop of highly skilled and educated workers. This gives small businesses an incredibly talented diverse pool of employees.

The Tech Industry

Boston has often been called the Silicon Valley of the East. The city is home to a very powerful and robust tech industry. Massachusetts is known to nurture innovation and be welcoming to new ideas in business. This helps create well-paying jobs and translates into more prosperity for the local economies. This has helped the state become one of the top five places for tech in the country.

A Nurturing Community

Massachusetts has created a community where small businesses rarely feel like they are alone. There are support networks all over the state that help small businesses connect with mentors or industry supporters through thriving online communities. Massachusetts also has a lot of state grants and incubator programs that nurture the growth of small businesses.

The communities also go out of their way to stay true to local small businesses instead of supporting some of their larger competitors. The towns take pride in their locally sourced economic opportunities and want to help their neighbors grow on a steady path to great success.

What Is A Tax Resale Certificate?

Massachusetts is a great place for small businesses but does have a fairly high state sales tax. One of the best things a savvy entrepreneur can do is register for a Tax Resale Certificate to save money on unnecessary taxes.

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

Getting Started In Massachusetts

Businesses in Maryland that provide any type of taxable goods and services must first register as a vendor and get a Sales Tax Permit from the Massachusetts Department of Revenue. This permit is also known as a seller’s permit, sales tax number, or sales tax license.

Is The Tax Resale Certificate The Same As A Seller’s Permit?

Even though a tax resale certificates are called reseller’s permits in some states, it is important not to confuse them with seller’s permits. A seller’s permit allows a retailer to charge tax on items that they are going to sell to a customer. A tax resale certificate allows you to buy items that are intended for resale without paying a sales tax on those items.

Does A Vendor Have To Accept My Tax Resale Certificate?

It is extremely important to a retailer’s bottom line that they do not pay sales taxes on goods if there is a possibility that the tax can be exempted on a state level. However, it is also crucial to understand that a wholesaler is not required to accept your tax resale certificate in some states. 

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

A vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Goods you or your employees purchase for private use.
• Goods your business gives away for free of charge or as gifts.
• Goods your business uses to conduct business, like office supplies, equipment, etc.
• Goods your business rents to be used and not for re-leasing.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Texas Is A Fantastic Place For Entrepreneurs

Texas has always been a great place for people with big dreams. Very recently Texas has actually been recognized as the best place to start a business in all the United States. The state has been recognized for creating an amazing business environment for mostly the following reasons:

• Great Talent
• Thriving Metropolitan Areas
• Good Quality Universities
• Tax Benefits
• Innovation
• Friendly Towards Small Businesses

Getting A Tax Resale Certification Is One Of The Best Things You Can Do As An Entrepreneur

If you decide to start a business, a tax resale certificate can really save you money on taxes.

In short, a tax retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell, such as wood for a cabinet.

However, the process can be difficult and the rules are different for each state. That is why TaxResaleCertificate should do all the hard work for you. We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence. Make sure you check out our second blog in this series so you can learn even more valuable information about tax resale certificates.

Texas Has Great Tax Benefits

The Business Tax Climate Index recognizes that Texas is a very appealing location for small businesses. This is because the state does not have an individual income tax or a corporate income tax.

Tax Resale Certificates Are A Great Way To Save Money In Texas

The state allows you to be exempt from sales tax if the taxable item is intended for resale. This means that you need to provide the seller with a resale certificate or pay a sales tax on the item. The certificate serves as a guarantee that you intend to resell the item, so sales tax will not be needed at the time of purchase.

What Information Do I Need For The Resale Certificate Registration Form?

You must provide the following information:

• The name and address of the purchaser
• The name and address of the seller
• The registration number of the purchaser
• An accurate description of property purchased for resale
• The reason for the exemption
• A statement that if the property is put to use in a taxable manner that the purchaser will remit the consumer use tax
• Date and Signature and Title of the authorized individual at the purchaser

Make Sure You Understand Your Responsibilities

You can only use the resale certificate in Texas if the goods you are purchasing are going to be resold. If there is any uncertainty about whether or not you are going to resell the items, then you should definitely not use the resale certificate for the tax exemption. This will make your business liable for the unpaid taxes on the original sale. The use of a resale certificate in this manner to evade taxes is illegal and can result in criminal charges ranging from misdemeanor to felony, based on the amount of taxes evaded.

How Do You Submit A Resale Certificate In Texas

A seller can not legally sell you any goods tax-free in Texas if you do not present them with a properly filled out resale certificate. The original, filled-out certificate should be furnished to the seller immediately when the purchase is being made. It is not required for you to send a copy of the form to the Comptroller’s office. However, if all of your purchases are for resale, your vendors are allowed to accept a blanket resale certificate, which will cover that all items purchased going forward are intended for resale.

Remember To Verify Any Tax Resale Certificate Presented To You

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate.