What’s a resale certificate? When should you use it?
Well, if you’re using a resale certificate, that means that your vendor will not charge you sales tax. So that’s a wonderful thing, isn’t it? Now we can’t do that for everything we buy, what can you use a resale certificate for? Well, it is simply things that you are going to resell.
So if you are buying canvas at Michael’s, and you’re going to resell that as a part of a project, you should not pay sales tax on. Because your customer should be charged sales tax when they buy that product from you. So take a look at what you’re buying and make sure you’re using a resale certificate whenever possible.
Then don’t use it on things that you’re going to consume, like paper towels, napkins, cleaning supplies, things like that. It must be something that you are going to resell specifically to a guest. So hope that saves you a little bit of money and you may have to have him bring up some water separately to do that, but it’s well worth the cost in the long run. If you have questions about how a resale certificate should be used, please comment below.
Donna Bordeaux, CPA with PYOPAccounting.com
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.