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Sales Tax Exempt Clients

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LisaHarris
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My agency has some clients who are exempt from sales tax, but our agency is not exempt. A few of our vendors won't accept the client's sales tax exempt certificate since the billing comes through the agency and not directly to the client. So, we're being charged sales tax, but are unable to pass the cost along to those clients. Has anyone else encountered this issue? And if so, how have you handled it? Thanks for any insight!

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Glenn Towle
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Seems like the clearest solution is to register yourself with the state as a reseller, thereby becoming exempt. Presumably you are already collecting and remitting applicable sales taxes on all your non-exempt clients. If you paid sales tax on behalf of an exempt client, with proper documentation you should be entitled to apply that as a credit against the sales tax you are collecting and remitting. Since sales tax policies vary by state you should contact a CPA familiar with the specific laws applicable in your jurisdiction.

Although not a CPA, happy to talk with you further - 301-580-6300

Glenn Towle

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