Common business sales tax mistakes every re-seller should avoid

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Common business sales tax mistakes every re-seller should avoid

The rules governing business sales tax can prove quite complicated, especially for the re-seller. It is even more challenging because different states have different rules, making it more confusing.

As a re-seller, there are many business sales tax details you must attend to, and although complex, they are your obligations. When you fail to meet your business sales tax obligations, the consequences may affect your business adversely.

Therefore, to help you decipher business sales tax regulations, below are some common mistakes re-sellers make and how you can avoid them.

Common Business Sales Tax Mistakes Every Re-seller Should Avoid

1.    Use your re-seller certificate the next time you buy wholesale

Under the US tax law, the end consumer should pay sales tax. Therefore, as a re-seller, it is your right not to pay sales tax on goods purchased to resell.

The only scenarios where you are required to pay sales tax is when you buy goods for your personal use, or you wish to give them away. Hence, you should use your re-seller certificate when making purchases for your business to avoid unnecessary expenses.

2.    Deciding the correct business sales tax charges on your goods

It can be confusing to read through the business sales tax compliance terms to understand how much to charge on your products and services. It is even more overwhelming as different states have different charges and structure.

Therefore, you should seek expert help with setting up appropriate measures to meet your business sales tax needs.

3.    Inability to vet sales tax exemption certificates properly

There are organizations under the U.S law that are not required to pay business sales tax.  But, it is vital that you properly vet their sales tax-exemption certificate before you sell to them. Failure to do so may lead to trouble, and you might be audited.

Never take the word of an organization saying they are tax-exempt, be sure to authenticate these claims to avoid paying unwanted debts in the future.

4.    Inability to remit sales tax when you have a nexus with a State

Nexus simply means the connection or link you might have with a state. However, this does not have to be a physical link; it may apply for e-commerce sellers who have affiliates or click-through nexus with other states.

Some states charge business sales tax on such transactions, and therefore, businesses making sales in that way are required to pay sales tax to the state where the click-through originates.

If you have a physical or click-through connection with a state, endeavor to find out whether you are required to register and pay business sales tax in that location.

5.    Not having accurate financial records

Your Business records, especially your business sales tax records should be carefully kept.

A carefully kept sales tax records while avoiding these five re-seller mistakes should help you successfully meet your business sales tax compliance necessities.

Therefore, when you find it overwhelming meeting your tax requirements, get help from an expert and set up a reliable sales tax program.

Do you need assistance? We are here to take these burdens off your hands. All you need do is contact us at (212) 320-8191 or by email at

Urgent Tax Services

6009 16th Ave,

Brooklyn, NY 11204

Ph. (212) 320-8191

Fax (646) 626-6447

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