When I got my EIN last year I thought it was to help me identify my business and to avoid paying sales tax like when farmers buy a piece of machinery. I tried to buy a mower and they said they would not take off sales tax and would only honor it if I were "tax exempt from the dept. of revenue."
Sooo, what number do I need to not pay sales taxes on stuff like that?
I called IRS and the Dept of Revenue and no one can help me.
dont know about your state but in most of them you cannot buy equipment for your business use tax exempt. In Ohio i can buy materials i use on a job tax exempt but then i have to bill the customer for the tax. Only goods and materials for resale can be purchased tax exempt.
EIN is a Federal tax number, like your SSN. Sales tax number is from the state. I need sales tax number to collect and make payments to the state. In PA. the only thing I don't pay sales tax on is an item I get for resale.
Ah ha! Thanks Grandview. My grandfather (long time tobacco farmer) got in a funk when I told him I paid sales tax on equipment, as he does not due to his tax exempt farm number.
Ah ha! Thanks Grandview. My grandfather (long time tobacco farmer) got in a funk when I told him I paid sales tax on equipment, as he does not due to his tax exempt farm number.
Oh okay. So what is it that my grandfather has for his farm that enables him to avoid the sales tax? Is the only purpose for my number when I file taxes?
Oh okay. So what is it that my grandfather has for his farm that enables him to avoid the sales tax? Is the only purpose for my number when I file taxes?
Farming ,same thing whole different cow. Yes,that is your ID for everything thing your company does. Bank accounts ,taxes,buying trucks in your company name.
In NY I bought a hedge trimmer, chain saw, repair to my mower, parts for the repairs and maintenance on equipment that I did myself.
I provided my state with a list of purchases made for my business that were not items for resale as listed above. Along with photo copies of the receipts.
NYS will refund the sales tax you paid or give you a credit against the sales tax you required to pay.
I just cashed a refund check for $128.
So the best thing to do is contact your states sales tax board.
I suppose It depends on the the state but Sales tax in Texas goes to then end user.
That means I pay sales tax on tools and equipment to use in my business.
Service is taxable as well.
There is an exception to some "home improvement" activites but that is not what we are talking about here.
The upshot however is you include the sales tax in the cost basis of the equipment when you do your income taxes.
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