For every taxable transaction making its way through the marketplace, somebody should be collecting sales tax.
Your clients that have businesses selling into the resale, wholesale or exempt entity markets fall under a vast web of compliance duties, with the onus on the vendor to get it right. When it comes to sales tax, businesses are best served to “collect the tax or get the doc,” which means to get a legitimate document attesting to the proper exemption that applies to that transaction.
Someone Else’s Problem
Every transaction between a buyer and a seller should be taxed or documented, which is a lot of work. Instead, many companies take the risk that they won’t get caught, while others assume they are exempt from sales tax collection because they are selling to a reseller or non-taxable entity instead of the end-user.
How can companies ensure, without documentation, that they are dealing with a licensed reseller or tax-exempt entity? Without documented proof, the company should be taxing the transaction and collecting. Yet, few companies operate in this fashion if they perceive they are pure resellers, wholesalers or selling to exempt customers.
Find out how we got here, the new rules, and how to get it right at CPA Practice Advisor.
Want more specific knowledge? Tune in to a free, 1-hour CPE webinar on March 6 to learn more about exemption and resale certificates, sponsored by Avalara. Register now.
Empower yourself and your clients by being aware of these and other exemption/resale certificate issues so you don?t get caught under audit!
Let’s talk tax
Judy Vorndran can be reached at email@example.com or 720.227.0093. Follow Judy on LinkedIn.
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