I have a sales tax question.?

Question

Can a company in OK sell a piece of machinery to someone who is going to use it in TX and not have to charge sales tax? I have a stamp for farm use exemption, but this isn't farm use. What info will I need? Will I need any forms?

Answer 1

It depends on if you have sales tax nexus in Texas. If this is the only sale of that sort and you are delivering common carrier, then it is more than likely that you do not have to collect Texas sales tax.

For the purchaser, if sales tax is not collected by the seller and the product isn't exempt from sales tax (like you mentioned), then they would usually pick up use tax (the equivalent of paying sales tax by themselves) on their own sales tax return.

Of course, all this is dependent on state law. It might be worth a call to the Texas Department of Revenue to be certain.

Answer 2

If the sale takes place in OK, sales tax will be assessed. If the sale takes place in TX (such as mail-order or Internet based) and if the seller has no nexus in TX then sales tax need not be collected in OK.

(Legally you'd still owe the appropriate sales tax to TX but states have not yet pursued that angle though someday they may start.)