Do you know how to use a resale certificate to eliminate paying excess sales tax?
But resale certificates should be used when buying things that are going to be resold to your end user, your customer. So if you’re buying supplies that you want to use to make cakes, do recipes with, and utilize in a finished good or finished product that you’ll be selling to the consumer, you shouldn’t be paying sales tax on it.
That just saved you anywhere from 5 to 10%, depending on your local sales tax. So make sure that you utilize that resale certificate, whenever buying things that are going to be part of your finished product. Now, you can’t use this on things like paper towels and supplies, planning supplies, things like that. It must be something that will be in the final product that you were going to resell to your customers and charge sales tax on when it’s a finished product.
So, take your sales tax ID number and that gets listed on the resale certificate, and let your banker know that you’re purchasing for resale. Now, sometimes you may have to split up the order into two different charges. Maybe some of the items are for resale and some are not, but it’s well worth the cost to save that extra sales tax that you don’t need to pay.
If you overpaid, you probably won’t ever be able to get it back. So, make sure you use your resale certificate for things that are going to be part of something you will sell to your customers.
I’m Donna Bordeaux from SweetToothCPA.com. Please follow us on Facebook, Instagram, and LinkedIn. Make sure you check out our blog and website from the link below. Subscribe to our YouTube channel and hit the bell to be notified when we post. To contact me, email me at email@example.com.
Donna Bordeaux, CPA with Sweet Tooth CPA
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.