Sue Hintz on thu 25 jul 96
I'm just starting a new business. I can now buy my things without tax.
I thought I could only buy clay and chemicals withou
tax but the store I am purchasing from tells me that
all of the potters buy everything before tax like
cones, toolsthought I should pay tax on these.
Can anyone tell me what the deal is on this?
be resold I d
Jeremy/Bonnie Hellman on thu 25 jul 96
Sue- each state is somewhat different and the best way to learn is to call
or write your state's sales tax office and ask for their brochure
applicable to artists. The other choice may be to go with manufacturers, in
which case you could purchase everything related to the manufacture of your
product. In Pennsylvania there are several offices (none toll free) but
they have a number of brochures. As a rule, if your supplier is telling you
that their other artists do not pay sales tax on a class of item, the odds
are good that you don't need to pay sales tax. Most commercial sellers are
diligent about collecting sales tax where they believe it is required!
Another caution is that when you sell your clay art, each state may have
difference nuances as to what conditions there are for selling tax free.
However, in general if you are selling to a tax exempt entity (as in a
reseller) BE SURE TO GET A COPY OF THEIR EXEMPTION CERTIFICATE and keep it
on file FOREVER or at least 7 years. The rules for not charging tax on out
of state sales vary from state to state--some may be happy with a
shipping/mailing receipt, others may require a written order from out of
state send out of state. There are probably lots of people who could tell
you horror stories of sales and use tax audits and of significant dollars
of tax and penalties levied long after the sale is made. Basically, if you
do not collect sales tax on a sale you make, and the state determines that
you owe the state sales tax, it will be at your own expense.
Sorry not to have more exact information for you. I don't know where you
live and in general I don't deal with sales tax a whole lot and I'm not a
ceramics business (yet). I am a CPA in Pennsylvania. Bonnie
>I'm just starting a new business. I can now buy my things without tax.
>I thought I could only buy clay and chemicals withou
>tax but the store I am purchasing from tells me that
>all of the potters buy everything before tax like
>cones, toolsthought I should pay tax on these.
>Can anyone tell me what the deal is on this?
>be resold I d