Simple question about tax id's

[john1]

Hey guys, I have a shop who wants to get a bulk of souvenir decals and sell them to the local area.

The customer said they have a tax id # so that means they wouldn't be charged tax since they are re-selling these.

Is that right or do they get charged tax still?

Thanks, I know it's a no brainer to some but i wanted to make sure before i wrote out the invoice.

 

[thewvsignguy]

John, I'm not 100% sure but from what I remember the customer must provide you with a form (I don't know the exact one) that was filed in the state of MD that says they are tax exempt or not for profit. If they can provide that paper keep a copy for yourself and keep that form with any or all invoices when you turn in your taxes.


I would charge the tax anyways because if he don't pay it you will.

 

[CS-SignSupply]

They need a resale certificate or sales tax exemption certificate. If that is not legit and on file at your office and you get audited, you are responsible for paying the sales tax plus penalties.

A Tax ID aka EIN# is simply a number used by the IRS to identify the business.

To be 100% sure, call your CPA or state department of revenue sales tax division.

 

[AwardImage]

Someone has to pay tax

 

[qmr55]

A tax ID # doesn't exempt them from paying taxes. What will exempt them is either a resale certificate or sales tax exemption certificate, some places even make sure your resale certificate is specific to the trade. You need that on file for when the feds wanna check up on you and make sure you're not skipping out on their end. As awardimage said, someone has to pay tax, so if they have a resale certificate then tell them to fax it over and keep it on file, but if you wanna be a buster make sure it is trade specific....really just to cover yourself in the future. Good luck.

 

[webguru]

This just might be of some help.

https://interactive.marylandtaxes.com/Business/VerifyExempt/User/Home.aspx

 

[john1]

Thanks guys, That last link works great!

 

[Mosh]

Get their tax ID number...

 

[thewvsignguy]

Quoted from our CPA:

"The tax exempt ID is a wallet sized card that has the number issued by the Comptroller's office displayed on it. The color of the card varies with type of exempt entity i.e.: 501, volunteer fire,etc. Valid cards will show an expiration date of 9/30/2012. I recommend you make a copy of the document, and keep it in your files."

 

[john1]

Thanks everyone, I looked up that customers ID and it's not exempt.

There are a few body shops who ask me to do insurance jobs that they don't get taxed on the products but they tax the end user (their customer). It's essentially a part i am providing them.

 

[FireSprint.com]

John, be careful here. I'm worried you'll lose a customer.

They won't be listed as "Exempt" from sales tax unless they are some kind of non-profit. What you are looking for is an exemption for just this sale because they intend on reselling it.

Purchasing goods sales tax exempt for the intent to resell is a common practice. In fact. you should be buying many of your supplies exempt from sales tax.

Sales tax, is to be paid for by the final consumer, not the resellers along the way.

--

Now if he doesn't have a valid sales tax permit, that's a whole different issue.

 

[ICeMAnAbk]

Read...... I've had capital signs subcontact to me in the past. The form will mention resale. Get stuff in writing. Its just to protect YOU! As firesprint mentioned nonprofits like churchs or gov entities like fire stationed will be tax exeption bc of their affiliation.

 

[jthies]

PA Sales tax question on permanent exterior property sign...

Should I be charging my customer pa sales tax on a permanent exterior property sign? The tax code says "personal tangible property"....or what parts of the total sing is taxible?...materials, fabrication or all of it (retail cost)?

 

[FireSprint.com]

http://www.revenue.state.pa.us/portal/server.pt/community/revenue_home/10648

You should probably just ask them. It varies from state to state. Here in Nebraska, I believe you would need to charge sales tax.

 

[gnemmas]

It is actually the same for us to be exempt from paying sales tax from our suppliers or when we buy product for "re-sale", we will have to provide them with "re-sale" form for them to keep in file.

The key is to "re-sale", so we will collect sale tax instead of our suppliers. For instance, if we buy business cards for our own use, we have to pay sales tax. Bu if we order business cards to re-sale to our customers, we don't pay sales tax to the printer, but charge our customers sales tax.

Have their signed re-sale form on file so you are protected. If he abuse the form and get audited, he will have to cough-up the taxes.

 

[J Hill Designs]

Should I be charging my customer pa sales tax on a permanent exterior property sign? The tax code says "personal tangible property"....or what parts of the total sing is taxible?...materials, fabrication or all of it (retail cost)?

here in CA we charge tax for the product, but not installation labor

 

[FireSprint.com]

It is actually the same for us to be exempt from paying sales tax from our suppliers or when we buy product for "re-sale", we will have to provide them with "re-sale" form for them to keep in file.

The key is to "re-sale", so we will collect sale tax instead of our suppliers. For instance, if we buy business cards for our own use, we have to pay sales tax. Bu if we order business cards to re-sale to our customers, we don't pay sales tax to the printer, but charge our customers sales tax.

Have their signed re-sale form on file so you are protected. If he abuse the form and get audited, he will have to cough-up the taxes.

Well put.

 

[2B]

It is actually the same for us to be exempt from paying sales tax from our suppliers or when we buy product for "re-sale", we will have to provide them with "re-sale" form for them to keep in file.

The key is to "re-sale", so we will collect sale tax instead of our suppliers. For instance, if we buy business cards for our own use, we have to pay sales tax. Bu if we order business cards to re-sale to our customers, we don't pay sales tax to the printer, but charge our customers sales tax.

Have their signed re-sale form on file so you are protected. If he abuse the form and get audited, he will have to cough-up the taxes.

exactly,

never take them at their word, always have them fill a form out.

 

[Smokeybearfan]

Many places here in Maryland have a minimum purchase of 250.00 before you can use you tax ID for a tax free purchase. Not sure if that is the law but everyplace I buy things has the 250 minimum here in Maryland.

 

[john1]

min of $250 in md? Never had that problem before with any of the suppliers i use.

Called the state and they said you don't need a resale certificate exactly, They said if you know they are buying it from you, then reselling in their store their sales and use tax license copy is enough. The resale form is more of a blanket of some sort is what i was told.