When Your Business Is Required to Pay Sales Tax?

There are two specific mechanisms which permit non-payment of sales tax by a business: exemption and resale.

If a business is a non-profit, charity, or religiously-affiliated concern, it may qualify for sales tax exemption status. The states vary in their statutes regarding exemption qualifications.

Many purchases demand the imposition of business to business sales tax. The only items subject to resale status are those which become components of the product being resold. For example, if a clock manufacturer purchases paper on which to print in-house created brochures about its clocks, that paper is taxable. But the same paper purchased by a printer to manufacture brochures which it sells to its customer is not taxable, by virtue of its resale status.