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Sales Tax out of State to resellers?
Here's the case:
Distributor in California selling to retailers out of state. (Usually in California, we ask for the retailers' resale certificate. But what happens in a situation when it's out of state? And how do we verify that they are retailers, not final users?
4 Answers
- troLv 71 decade agoFavorite Answer
I used to have a carpet store and they purchased carpet all the time from out of state vendors, most of them did not charge sales tax because they had a sales tax certificate in the state
the vendor reported the sales tax collected on their sales to each state the sold
- 1 decade ago
As long as you have no nexus (presence) in the other states, there is no need to collect sales tax on those out of state sales. It is up to the retailer to collect and remit the proper amounts in their respective states.
You should not be charging sales tax to out of state purchasers, whether they are resellers or end users.
Source(s): I am a practicing CPA. - Wayne ZLv 71 decade ago
No sales taxes are due to California if the item is shipped out of state regardless of its use.
Keep the invoices and the shipping records as proof in case of an audit.
- RetiredDebtFreeLv 61 decade ago
Ask them to fax you a copy of the Sales Tax Permit or their Business License. Or they can mail you a copy, or scan and email you a copy. Without that, you have no proof.
