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Young Entrepreneur Forums » General Business » Legal » B2B sales nontaxable?



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Old 02-19-2008, 02:02 PM   #1 (permalink)
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B2B sales nontaxable?

I think I remember reading somewhere in some cases that B2B sales are nontaxable, Is this true? Does it count for certain types of transactions or all or none? Reason asking is because my business is about to start selling ad space and we were wondering if we were going to have to pay the state sales tax on the sales or not. These are going to be $150-$40,000 transactions and we have planned on eating the 6% sales tax in my county if we had to but just wanted to be completely sure.
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Old 02-19-2008, 02:17 PM   #2 (permalink)
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Just my opinion, and not legal or accounting advice (and might be just plain wrong, for that matter):

Sales tax is only required when selling to an end customer. So if you're selling B2B for your business customer to then sell at retail to its customer, then sales tax isn't charged.

Again, I might be completely wrong here.
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Old 02-20-2008, 08:52 AM   #3 (permalink)
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This is the reason you are often required to provide a FEIN, to prove that you are not the end consumer of the product and thus responsible for applicable taxes.
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Old 02-20-2008, 12:10 PM   #4 (permalink)
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What I'm selling to other businesses is advertising space not a product that I'm going to be selling. They give me the advertising materials in the certain format and I display it for a certain amount of time - nothing else.

So I guess tax has to be charged on these sales - Thanks for answering my question.
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Old 02-20-2008, 01:00 PM   #5 (permalink)
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Yeah, that sounds pretty sales-taxable to me.
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