State Sales Tax Rates

State Sales Tax Rates 2016 Sales Tax Law for customers and businesses

Sales Tax Exemption Certificate

Any organization or company with a partial or full sales tax exemption must obtain a sales tax exemption certificate for their state in order to make tax-free purchases. The process of obtaining this certificate depends on the type of tax exemption the transaction qualifies for.

Resellers, Bulk Purchasers, and Businesses
Any entity buying goods for resale or as raw materials can purchase these goods sales tax free. A restaurant, for example, will not have to pay sales tax on raw food purchases as they are an ingredient in the final product to be sold to the consumer. Likewise, department stores do not need to pay sales tax on bulk goods purchased from a supplier - the sales tax is paid by the end consumer and collected by the retailer.

To benefit from these sales tax exemptions, any company placing a qualifying order must present the vendor with a valid sales tax exemption certificate detailing the qualifications for exemption. The vendor must then report this certificate with their next sales tax payment.

Thirty-eight states currently accept the Multistate Tax Commission's Uniform Sales and Use Tax Exemption Certificate as an acceptable exemption certificate for reseller purchases. A blank PDF of this form can be downloaded from here. States that do not accept the MTC's form will have state-specific sales tax exemption documents available through their Department of Revenue website.

Nonprofit, Religious, and Charitable Organizations
Most states exempt qualified nonprofits, religious groups, and charities from paying sales tax on certain purchases. Each state has slightly different requirements, procedures, and exemption benefits, and there is no multistate application form available as there is for resellers. Nonprofits interested in sales tax exempt status should contact their state's Department of Revenue for the applicable forms and certificates required. It should be noted that not all nonprofit organizations are eligible for tax exemption in all states.