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Posted by hlunsford@bellsouth.net on June 29, 2006, 12:15 am
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Mark A. Hvasta, CPA wrote:
>>> I am writing up my first business plan. I've identified
>>> products I want to sell and a process in which to sell them.
>>> I contacted one company, but they refuse to give me a
>>> wholesale price list- or other information- without a valid
>>> business tax id. I am interested in getting the id from IRS
>>> and state tax agencies and pursuing this. However, if the
>>> wholesale margins don't work out, I will cut and run and
>>> chalk it up to experience. My concern is that if I don't
>>> pursue this project, I will have a business tax id and no
>>> income and will then have to file some kind of tax form. My
>>> concern, and it may be irrational, is that this could
>>> trigger problems for me like a potential audit. Is this a
>>> valid fear?
>
> The "state tax ID" they're probably looking for is probably
> a state sales tax exemption certificate. This will allow
> you to purchase goods for resale without paying sales tax
> (and from the seller's perspective, without collecting it).
> As you're looking for wholesale prices lists, they'll
> definitely want to make sure you're eligible to purchase
> from them w/o them having to worry about collecting &
> remitting state sales taxes.
Additionally, some states require a federal ID # before
they will issue the desired sales tax number. I suppose
it's a check and balance on people who think that mere
possession of a sales tax number will allow them to buy
everything without paying the tax.
ChEAr$,
Harlan Lunsford, EA n LA
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