I have a quick question. Since speaking to some other local small business owners, most in retail business. They all have tax ID exempt #s to use when reselling products. If i go to a small nursery, buy $3k in trees for a customers landscape job, why do i have to pay them the NJ 7% sales tax for a total of $3,210. THEN, i resell them to the customer, say even if i made zero markup and resold at $3,210.00, i now am charging them this plus my bills 7% for a total of $3,434.70? The state is double taxing the same item for the same person essentially or is this how it really works? For the last few years, ive mainly done lawn service, so mulch, stone, dirt was my only purchases that i was paying out sales tax on myself then reselling. When i receive a check from a client, i must claim that as income and is taxable right? Or can you keep an excel form with all of your expenses that were direct resale? If i paid all the taxes on specific resold items, can that be deducted from what my yearly income taxes are for 2006? I feel like an arse after speaking with some other people, i always think im on top of things, things like this ive spoken to other guys about and theyve told me no, you have to pay the tax and then charge the customer the tax on whatever your reselling it at.