SALT-ED Q&A: How do I avoid paying sales tax on the purchase of exempt items?

General Business

July 28, 2015
by Daryl Ohland, CPA, CIRM, MST

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Daryl Ohland Daryl Ohland, CPA, CIRM, MST
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Q: How do I avoid paying sales tax on the purchase of exempt items?
 
A: In most states, all sales of tangible personal property are deemed taxable unless an exemption exists.  Situations in which an item is exempt by statute are limited, regardless of the purchaser or use of the item. Unless an exemption falls into the category of an item exempt by statute, regardless of purchaser, in order to avoid tax you are required to provide an exemption certificate or another document that contains all the items necessary to be treated as an exemption certificate:
  1. The name of the purchaser.
  2. The address of the purchaser.
  3. The signature of the purchaser (does not need to be an officer of the entity).
  4. A general description of the purchaser's business.
  5. The basis for the claimed exemption, including the seller's permit number of the purchaser.

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