Generally, the states require sales tax to be collected on sales unless valid documentation is obtained supporting an exemption, which may be requested annually.  Most common of such documentation is an exemption certificate for resellers or distributors.  Certain states may also provide direct pay permit for very large businesses that allow them to purchase tax free but self-assess use tax on taxable uses.  Some states will grant exemptions for certain purchases based on a project, based on the ultimate destination of the product, or based on what the product is used for.  Finally, many states allow exemptions for non-profits, by requesting a certificate or documentation of the non-profit status.  Regardless, the states will require this documentation to be properly completed and retained.

Under an audit, a business presents all exemption certificates. For any certificates that were not obtained, a business would be liable for the tax.  Additionally, in an acquisition, the buyer may want to be compensated for exposure related to missing certificates.  

If you are interested in pursuing exemption certificates, then click on the link to book an appointment or to send an email. We look forward to serving you and your clients.