Sales Tax Holidays
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There are two sides to every story, and sales tax exemptions are no exception. It may appear that the person who holds the most responsibility for handling sales tax exemptions correctly is the person who is making the tax-exempt purchase. But as with all things sales tax, it is rarely that simple. Sellers who accept exemption certificates have responsibilities too. And on either side – whether you’re the purchaser or seller – not handling exempt transactions and exemption certificates correctly could lead to costly issues come audit time.
We’re going to reveal some of the questions you need to ask yourself if you handle exemption transactions, both for purchasers and sellers. Asking yourself these questions could be the first step towards making sure you or your business is compliant for sales tax exemptions.
Ok, so you’re a seller. Exemptions are easy, right? If a purchaser wants to make a tax-exempt purchase, your sales representative or cashier gets the purchaser’s exemption certificate, and if everything looks good, the sales rep or cashier keys in the sale as tax exempt. Well, it’s not that simple.
If you’re a seller making exempt sales, these are some of the questions you need to ask:
These questions are good starting points to get you thinking about changes you may need to make in your company protocol for handling exemption certificates.
Administering sales tax exemptions and exemption certificates is just as important for purchasers. There are quite a few issues that you’ll need to take into consideration if you make exempt purchases. Asking yourself the following questions can help you on your path to making sure you’re compliant.
These are some good questions to get you thinking about the scope of your responsibility as an exempt purchaser, but there are many other factors to take into consideration.
Diane L. Yetter is a strategist, advisor, speaker, and author in the field of sales and use tax. She is president and founder of YETTER Tax and founder of the Sales Tax Institute. You can find Diane on LinkedIn and Twitter.