Sales tax exemption?

Chris has inspired me to post this question. How many of you are using a sale tax exemption form? IE not paying sales tax on your equipment, supplies etc?

Who’da whada’wa?
I don’t run a non-profit… How could I be sales tax exempt? Anyway, the sales tax is part of the expense… Please enlighten me :slight_smile:

Ok well I don’t know about VT so check with your state and your accountant. In Jersey if you are purchasing supplies to work on a customers home. You do not have to pay sales tax on those supplies. It’s called an ST-3 form.

The merchandise described in (3) above is being purchased: (check one or more of the blocks which apply)
(a) For resale in its present form.
(b) For resale as converted into or as a component part of a product produced by the undersigned.
(c) For use in the performance of a taxable service on personal property, where the property which is the
subject of this Certificate becomes part of the property being serviced or is later transferred to the
purchaser of the service in conjunction with the performance of the service.

I have to check off box C

a. A retail household appliance store owner issues a Resale Certificate when purchasing household appliances from a
supplier for resale.
b. A furniture manufacturer issues a Resale Certificate to cover the purchase of lumber to be used in manufacturing
furniture for sale.
c. An automobile service station operator issues a Resale Certificate to cover the purchase of auto parts to be used in
repairing customer cars.

I would fall under section C.

But again check with your state cause as we all know each state is differant.

I dont think you can add sales tax you charge a customer to your federal returns as part of an expense, if thats what you mean. As far as an expense for your supplies. I would rather not pay it at all, then have to deal with the IRS and the red flags that lot of deductions cause.

Publication 334 (2009), Tax Guide for Small Business

I have some customers that are tax exempt, will have to check w/accountant about tax on supplies, ive never heard that. It would be nice tho, so then you dont charge them tax on the materials just the labor?

Yup, in Jersey the sales tax is on the service/labor. I dont know about customers being tax exempt on labor. The only ones I have that are, are the federal government. I have never run into any other customer who has given me a certificate.

We have several accounts where they are tax-exempt, mostly in the human services category.

Are either of you required to charge tax on your window cleaning service?

I know I am. All service industries in Jersey have to charge sales tax. Again, the only clients I have ran into here who do not pay sales tax is the Federal. I would presume the State and maybe lower government but I dont have them as clients so I can’t say. It’s a real touchy area here in Jersey. I can only exempt my company from sales tax on supplies. As an example I have to pay sales tax on fuel or generators, truck, power washer etc. I also have to pay sales tax if I get my truck repaired or serviced etc. Only get exempt on supplys :frowning:

My post was addressed to Sharen and Dan. We know all about you, Ray.

Sorry Lar. I saw after I posted that you quoted to them. Ah well I’m an open book. Or more like an open comic book lol.

Don’t ever change, Ray.

We’ve had to collect tax for window cleaning in PA since 1993. I still get quite a few requests for the “green” price, but I tell them I claim all my income. Quite a few other services are taxable here as well, office cleaning etc.

Yes i have to charge sales tax on my services.

Just wondering what states do collect tax??

You do not charge sales tax, you collect it for the State. It is a pass through transaction. You do not declare it as income, it is not your money. You are acting as a revenue agent for the State. You must declare any fee you receive for collecting the tax. In Florida, the State gives us a 2.5% Collection Allowance of the first $2500 of tax collected.

In Florida it is called a Sales and Use tax. If you buy something to use in your business or to resell to others, you pay a “Use” tax. When you sell a product or service to others, you collect a “Sales Tax” They get you both ways. They even have a form you are legally bound to fill out to pay the tax on mail or internet order purchases.

The good part is, we have no State Income Tax in Florida

In PA it’s 6% for many services incl. WC, just as for sales of most goods. I believe we get a 1% discount off what we’ve collected if sent in early enough. My wife takes care of that, so I’m not really up on it.

Hey Dan,
Do you or your wife know the specific PA statutes that stipulates a requirement for service industries to collect a sales tax?

Hopefully this will help Sales, Use & Hotel Occupancy Tax

Then click on this link Retailers’ Information Guide (REV-717)

Thank you very much.

This will probably be a shock and create a firestorm of questions and maybe even anger some who read this. This is certainly not my intention.
The reason why I ask is because I have intensely studied and still do about taxes, things pertaining to government authority and it’s limitations. I realize most people in business want to do things legally and want to be responsible American citizens. I feel the same way. But the reality is, we don’t owe any income taxes if we are not contracted with the government in anyway. We don’t need to be licensed in any way as well. And I believe we don’t need to collect sales tax either. That’s why I asked for the specific statute. I did some lite research in the past. I read that the sales tax has a narrow application. I now want to look deeper into this issue after reading this forum discussion.
Americans need to relearn American history and the laws concerning these things. And to find out if we are indeed subject because we are not subject to every law that legislatures conjure up. Because I looked into these matters and continue to do so was one of the main reasons for going into business in the first place.
I think we all want a better future not only for ourselves but for everyone else as well. Because if I benefit other people should benefit. But none the less this is an extremely important issue that greatly affects all of our lives, everyday. We have literally allowed government to bank on our laziness, apathy, fear and ignorance. Like I said there is a lot to this and I could go on and on. I know this is not the forum (no pun intended) to discuss political issues.
Anyone interested or has any questions please check out Family Guardian or [URL=“”]Sovereignty Education and Defense Ministry (SEDM). These sites will have all the information anyone needs to learn and make a difference.