Resale certificate

[Anna]

This question has probley been asked before,I searched and couldn't find the answer.I just got a wholesale account and I have a resale certificate.Do I get the business that bought from me fill it out,then what do I do with it?Does this mean I want have to pay sales tax on the supplies I bought with my Tax l.D?

Thanks,Anna

[AAngels]

When you have a resale tax certificate, what I have to do is calculate my tax monthly and mail the Department of taxation a check for the amount.

That is your sales tax from what you sold in a month. But check with your Department of taxation where u live, each state might be different.

Hope this helps:D

[Anna]

I sold the candles wholesale to a business,don't they have to pay the tax on them.I have a sales and use tax resale certificate,I believe they have to fill out to prove I sold the candles wholesale.What I want to know after they fill it out,do I keep it,or do I mail it in?

[AAngels]

Yes, then I believe they have to pay the tax on it.

As far as the other part unsure. Call your dept of taxation just to make sure and I would always keep a copy of anything I have sold no matter what for your files.

[VerticallyEnhanced]

I saw you were from Texas, so keep in mind the following just applies to Texas Tax Laws.

Since your wholesale account will be reselling your items, they do not pay you the tax because they will ultimately be collecting the tax when they sell the item. You get them to fill out a resale certificate.

www.window.state.tx.us/taxinfo/taxforms/01-339.pdf

The certificate must be properly completed, which means basically all items filled in (taxpayer number, date, address, description of goods sold, etc.).

You are required keep this certificate on file for at least four years. Each time you sell to this particular taxpayer, you don't need to them to fill out a resale certificate each time. You can keep this first one on file and it is referred to as a "blanket resale certificate". When four years is up, if you are still doing business with this taxpayer, you get them to fill out another one, keep it for four years, and so on....

Whenever you are buying supplies which will be incorporated into your finished product and transferred to the customers (be it a wholesale account or a retail sale), you can issue a resale certificate for those items. You would fill it out with your information and issue it to them. Everything that is incorporated can be purchased under a resale certificate (wicks, wax, jars, soap ingredients, silicone, glue, ribbon, labels, etc.). If it is handed to the customer as part of your product, it can be purchased under a resale certificate.

You can also issue an exemption certificate for items you use to manufacture you products. There are some limitations, however. The manufacturing exemption applies to machinery or equipment that causes a physical or chemical change in a product in order to make it saleable. The manufacturing process generally begins with the first activity that changes raw materials or ingredients and ends with the packaging of the tangible personal property as it will be sold. Example of things that would be exempt: wax melter, soap mold, stick blender, heat gun, etc. There is an exception to this, however. "Hand tools" are not exempt. Examples of hand tools would be whisks, spatulas, hammers, etc. The exemption certificate can also be found at the same link I posted above. Here is a good link for info on mfg equipment:

http://www.window.state.tx.us/taxinfo/taxpubs/tx94_124.html

Confused? lol... It is all at times overwhelming.

[Anna]

Yes it is very overwhelming,and confusing.Sometimes I wish I didn't have a tax #.I'm just a small operation.