Question about tax exempt usage

[safyre]

I am slowly getting a business plan together and hope to get something off the ground within the next year. My question is about proper tax exempt usage. (please excuse me if this is a dumb question, I'm still learning & have quite a bit to digest!)

Can tax exempt purchases be used while you are testing out new batches & formulas? Say I plan on selling a little here & there to friends and family, however I'm buying supplies mainly to make small soap batches to test out new recipes and not necessarily selling the product. These are soaps I keep to test out and/or hand out to a few testers for opinions.

Or would it just be wise to not bother with tax exempt until full-fledged production and sales begin?

Thanks, I look forward to your answers!

[realmarcha]

Here is my understanding of the tax exempt usage. If you are using the supplies for resale, or to manufacture a product for resale; then any and all supplies used for the end product can be purchased tax exempt. If you are using the supply/purchase for business use, and it has NO resale value, then it is not tax exempt (example: office chair). The supplies used for research (testing) are tax exempt; it is part of manufacturing the end product. I do not pay sales tax on these supplies, and have been in business for 4 years now with NO problems. I have my taxes done by an accounting firm, so I would think, if it were a against the law, they would have told me so. My .02 cents for the day. HTH