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Taxes when selling to fleet leasing service..?

Discussion in 'Sales, Marketing, Pricing Etc.' started by DecalGenieTN, Sep 29, 2020.

  1. DecalGenieTN

    DecalGenieTN New Member

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    I am starting to sell decals to a trailer leasing company in Tennessee. I was told I do not charge them sales tax because leasing companies are tax exempt.. Anyone know how to bill this? Do I just bill them and not charge sales tax, and then file taxes on my profit?

    Thanks in advance!!
     
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  2. Notarealsignguy

    Notarealsignguy Very Active Member

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    Ask them for a certificate and you will be covered. Rental/Leasing companies aren't tax exempt per se but I believe parts and and other things that go into their rental fleet is tax exempt, like painting, tires etc. Now if it is for their own stuff like say tires or decals for their delivery truck, it is not exempt but that is their problem to deal with.
     
    • Agree Agree x 2
  3. Solventinkjet

    Solventinkjet DIY Printer Fixing Guide

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    That's how it works here in Colorado too. Just make sure you keep a current copy of their license on file or else when you get audited they won't accept an expired one.
     
    • Agree Agree x 1
  4. unclebun

    unclebun Very Active Member

    Don't know about your state, but in Missouri, the vehicle to be leased is exempt from sales tax, but not things the leasing company buys for its own use. We pay sales tax on vehicles at the Department of Revenue, not the seller, so it is very easy to deal with. The only sales tax exemption is when they submit the correct paperwork to the Department of Revenue.

    If they are claiming a resale exemption, they have to provide a Missouri Resale Certificate filled out with us as the vendor. You probably have the same in Tennessee
     
    Last edited: Sep 29, 2020
  5. WYLDGFI

    WYLDGFI Merchant Member

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    Wouldnt the leasing company be a technical reseller of your product? They're likely adding a couple $$ onto your product. We do stuff like this often. They are actually liable for collecting any sales tax for the decals and such.
    As said above...get their tax ID information and hold onto it.
     
  6. WildWestDesigns

    WildWestDesigns Major Contributor

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    If they are selling the decals, then they would be the ones responsible for collecting sales taxes, but you would still be responsible for having that exempt info on hand. If they do not present tax exempt info for you, then I would charge them versus just taking them on their word.
     
    • Agree Agree x 1
  7. StarSign

    StarSign Active Member

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    If you don't provide me with a tax exempt certificate before we do the job, you pay tax.
     
    • Agree Agree x 2
  8. Notarealsignguy

    Notarealsignguy Very Active Member

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    The lease/rental payment is taxed which is why they are tax exempt on purchases strictly tied to their rental fleet. One caveat with these leasing companies. They have to have a resale certificate in your state, out of state certificates do not work.
     
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