Resale Sales Tax Exemption
Updated: June 1, 2022
Overview:
We have created this dedicated tax page with all of the Sales Tax Exemption info available at this time. We ask that you carefully review this information and submit your required tax forms to [email protected].
We all know taxes can be difficult, so we have created a helpful Instructions and Example Guide to make this process as easy as possible for all parties involved.
Due to the ever-changing landscape of taxation, this information may change with or without notice. Also, under state laws, you may be creating nexus issues on your own and should keep informed of tax laws and discuss with your tax professional before taking actions as we are not providing tax or legal advice with these policies. If you have any questions regarding the required forms, please contact [email protected].
We are registered in all applicable states and tax jurisdictions in the USA to collect sales tax. Therefore, to prevent unnecessarily charging you tax on your exempt orders we are required by law to collect the appropriate Resale Sales Tax exemption forms. There are basically 2 approaches that states take to resale and exemption certificates : Accept only resale and exemption certificates for the state(s) in which you are registered (i.e., only the state’s exemption certificates), and accept resale and exemption certificates for your home state.
Resellers for whom we dropship outside your home state(s)
There are 2 organizations that are trying to unify the policies regarding drop shipping and sales tax exemption or collection, The Multistate Tax Commission (the "MTC" - website) and the Streamlined Sales Tax Governing Board, Inc. (the "SST" - website). Each have a long list of states that they are trying to coordinate with to have a uniform message and policies. For simplicity, we suggest filling out both forms with your applicable numbers in all states listed on those 2 forms.
Resellers for whom we dropship in certain states
In addition, even though these states may be listed on the SST or MTC forms, these states require their own forms and/or registration or we will be required to charge applicable sales tax:
Resellers for whom we ship product to New York
Resellers for whom we ship product to New York must fill out this form: CLICK HERE. PLEASE NOTE: If you are registered in New York, please fill out Part 1. If you are not registered in New York, please fill out Part 2.
Resellers who are registered in the below states.
For Resellers who reside in, or are registered in, any of the below states, please complete the appropriate states resale form:
Exempt Organizations
Since sales tax exempt organizations use these forms on a regular basis, they should have their appropriate state or federal form on file. Even though you made the sale, if we do not have your resale certificate on file for that state, we must have exemption form made out to us if we are drop shipping to them for audit purposes.
General
We will try to monitor this semiannually and provide updates, but you are responsible for your own tax situation. Due to the ever-changing landscape of taxation, this information may change with or without notice. Also, under state laws, you may be creating nexus issues on your own and should keep abreast of tax laws and discuss with your tax professional before taking actions as we are not providing tax or legal advice with these policies.
How To Determine Where You Have Sales Tax Nexus
In the U.S. retailers are required to collect sales tax from buyers in states where they have "sales tax nexus." The following business activities may create sales tax nexus:
- A location. This includes an office, warehouse, store or other physical place of business.
- Personnel. An individual who is an employee, contractor, salesperson, installer or other person doing work for your business falls under personnel.
- Inventory. Most states consider storing inventory in the state to cause nexus even if you have no other place of business or personnel.
- Affiliates. Someone who advertises your products in exchange for a cut of the profits creates nexus in many states.
- Selling products at a tradeshow or other event. Some states consider you to have nexus even if you only sell there temporarily.
- Economic nexus. When your business meets an individual state’s sales or transactions threshold.