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Checking someones tax ID


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Asking for a copy is the only way I can think of to be sure they have one.

Just because they give you a valid number doesn't necessarily mean it's really THEIR number. I try to match names and addresses, too. Here in North Carolina there is a state form that the re-seller needs to fill out and sign before we are suppose to sell to them without tax charge if they are in-state. We just keep them on file and bring them with us if we ever get audited.

Some states have passed legislation requiring businesses to collect tax on ALL internet sales ~ not just those in state. Maybe an anonymous call to the Department of Revenue for your state with some general question would be best.

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Is it 'our' responsibility as wholesalers to verify a tax id of a customer? I buy pallets of material directly from manufacturers (clariant, rhodia, hallstar and croda for example) and have never been asked to fax a copy of my tax certificate. The number is sufficient. the responsibility of the tax burden is on my company as the buyer. they are not the tax police.

Likewise, I do not require proof of certificates from customers who buy wholesale from me. It's not my responsibility to police them.

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Is it 'our' responsibility as wholesalers to verify a tax id of a customer? I buy pallets of material directly from manufacturers (clariant, rhodia, hallstar and croda for example) and have never been asked to fax a copy of my tax certificate. The number is sufficient. the responsibility of the tax burden is on my company as the buyer. they are not the tax police.

Likewise, I do not require proof of certificates from customers who buy wholesale from me. It's not my responsibility to police them.

In Texas, a wholesale supplier that sells tax free to people has to have a copy of their resale certificate on file (electronic, hard copy, etc.) They can accept it once and then it serves as a "blanket certificate" for four years from the date of issuance. If the purchaser only makes tax free sales from that supplier, they only have to accept a copy of the resale certificate once every four years. If the customer makes even one taxable purchase from that supplier, then they have to issue a resale certificate to the supplier on their next tax free purchase even if it is within the four year window.

A lot of states have what is called "good faith acceptance" of resale and wholesale exemption certificates. Basically what that means is that if the certificate is filled out properly (meaning all the info in on the form that is required including a number), it will protect you in the event of an audit. You accept it in "good faith" from the taxpayer, and you are assuming they are issuing it in "good faith", i.e. all info is correct.

On my wholesale application I do ask for a state tax number and check it against our state's database. Texas has a great website: http://www.cpa.state.tx.us/ and on that site, you can check to see if a taxpayer is permitted via their TP number or name: https://ourcpa.cpa.state.tx.us/staxpayersearch/SlsTxpyrSearch.jsp

Bottom line...check with your state's tax revenue department...every state, although similar in a lot of areas, do have differences.

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