Texas sales tax exemption
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  1. #1
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    Default Texas sales tax exemption

    How do I go about getting a Texas sales and use tax exemption?

    What are the steps do I need to take?

    Or what kind of person do I need to be talking to? A cpa or accountant. I know,I know,Iím laughing at myself as well.


    Iíve been reading for hours and hours until the screen started to go blurry and I feel like in just spinning my wheels. Itís like reading city ordinances. They word stuff that seem to contradict what they said one paragraph before.

    I have a DBA and I have my EIN number but to be honest im lost. Throw some metal in front of me and I can build just about anything within the capability of my tools and even a little more and be perfectly comfortable and confident but Iíve been doing it for 23 years but this other fweeew it canít be that hard. I guess it just takes learning like everything else.

  2. #2
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    Go to city hall and talk to the tax collectors office. There should be someone there who can help you. If they will let you in. Bring a mask

  3. #3
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  4. #4
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    Quote Originally Posted by metalpyro View Post
    Bingo. Q&A #4 at that link. I did this a few years ago. I had not idea what I was doing, and it was pretty painless in the end.

  5. #5
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    4 months ago I think I wouldve threw up when read the words city hall but thankfully we are all learning how to do our jobs and be safe and itís getting easier to get in touch with them. Thank yall

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    In Ohio I would need a Vendor License to collect and submit sales tax. If I sell to the general public, this is what I would need.
    Is this what you're asking?

    Since I'm a machine shop that only sells to businesses, I submit a Blanket Sales Tax Exempt form with each vendor I need to buy from and I'm not charges sales tax. There are multiple acceptable reasons to be tax exempt, you'd have to decide which fits your situation.

    Edit: Found this
    Texas Sales Tax Exemption for Manufacturing | Agile Consulting Group

  7. #7
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    Ignore the Agile Group link. They will charge you to do what you can do yourself by following #4 in the link to the comptrollers office. At some point, the comptroller will send someone to your facility and ask questions and poke around.

    In order to get your utilities to be tax exempt, you will have to get a useage study done by an approved engineering firm. May cost a couple hundred bucks, but in the long run it is worth it. Saves me $100+ every month. After 42 years that adds up.

  8. #8
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    I thought OP is looking for a sales tax exemption, not how to register to collect sales tax. Those are two completely different things.

    The link given in post #3 goes to a Texas gov't site that describes how to collect sales tax for in-state transactions -- is that what OP wants?

    Regards.

    Mike

  9. #9
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    Tax exempt, like buying materials and consumables (taps, end mills):

    https://comptroller.texas.gov/forms/01-339.pdf

    page 2. Fill it out and send it to your vendor and they should not charge you sales tax.


    If you sell finished product in state, you need to file for a sales tax permit. It's easy, just find the application fill it out, and they send you a cert a couple weeks later. Put it in a drawer. Then you remit sales tax you collect to the state when you file with the comptroller quarterly. Don't be late (30 days after quarter ends). $50 late fee.

  10. #10
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    Quote Originally Posted by CosmosK View Post

    Then you remit sales tax you collect to the state when you file with the comptroller quarterly. Don't be late (30 days after quarter ends). $50 late fee.
    Unless your customer gives you an exemption certificate and an exemption permit you are supposed to collect sales tax for all goods and services provided. Notice two forms. The exemption certificate basically says why you are exempt(resale, part of product for resale,etc) while the permit form provides the permit number. Some categories of labor cannot be exempted from sales tax as well as some material goods, like crushed granite.

    30 days is not quite right. Due date is usually around the 20th of the month after the end of the quarter. Don't ask me how I know this. Texas Workforce Commission reports are due in 30 days.

  11. #11
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    Quote Originally Posted by alphonso View Post
    Unless your customer gives you an exemption certificate and an exemption permit you are supposed to collect sales tax for all goods and services provided. Notice two forms. The exemption certificate basically says why you are exempt(resale, part of product for resale,etc) while the permit form provides the permit number. Some categories of labor cannot be exempted from sales tax as well as some material goods, like crushed granite.

    30 days is not quite right. Due date is usually around the 20th of the month after the end of the quarter. Don't ask me how I know this. Texas Workforce Commission reports are due in 30 days.
    Yes, if your customer is the end seller of product (you makes parts for them), then you need stuff from them, reseller or whatever permit.

    Ok, maybe it's 20 days. it's quick. I just got burned for $150. 2 quarters and one yearly franchise tax report all late. Nothing came in the mail on the franchise to remind me. I now have post-its on my calendar so I won't forget.

  12. #12
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    In Texas you need a DBA, LLC, or a Corp.
    Look here for sales / use tax exemption.

    Sales and Use Tax

    Doug

    PS, DO NOT do work that requires sales tax. Make every customer provide you with a tax exempt permit.
    If even 1 customer makes you have to file sales tax, it opens you to more scrutiny, possible late fees, etc.


  13. #13
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    Quote Originally Posted by CosmosK View Post
    Tax exempt, like buying materials and consumables (taps, end mills):

    https://comptroller.texas.gov/forms/01-339.pdf

    page 2. Fill it out and send it to your vendor and they should not charge you sales tax.


    If you sell finished product in state, you need to file for a sales tax permit. It's easy, just find the application fill it out, and they send you a cert a couple weeks later. Put it in a drawer. Then you remit sales tax you collect to the state when you file with the comptroller quarterly. Don't be late (30 days after quarter ends). $50 late fee.
    If you got to the second form it does not need a sales tax number to be valid. When you buy consumables to produce a product for sale they are exempt. So raw material, drills and cutters, cutting oil or coolant, shipping supplies, and cleaners used in production (kerosene and detergents) are all exempt if used in producing parts for resale.

    The products we make are used in production of items for resale so we collect no sales tax even though we do have a sales tax number. They send us a form once a year and we fill it out and send it back showing no taxable sales. We do not do work for the public that could be taxable. If a friend asked for a lawn mower blade to be sharpened or a part made that would be taxable, I would do it for free.
    I have gotten into disagreements with local retailers because they are not used to the second form used by manufacturers. (Nobody in this country makes anything any more. Sometimes I want to slug the person behind the counter that tells me that.) I have gotten letters for the state comptroller that my use is indeed exempt


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