is this legal? does it benefit me?
i am starting up a business and purchasing equipment and supplies for the business. can i use my EIN to reduce the taxes paid on the supplies?
2007-05-16 11:08:47 · 6 answers · asked by AMW 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
no
you'd need a resale tax permit from your state for that, but if you are going to use the item yourself, you'd still have to pay the tax, so no benefit there.
2007-05-16 13:20:55 · answer #1 · answered by Jo Blo 6 · 0⤊ 0⤋
An EIN is useless for not paying sales taxes. You must be registered with your state to collect and pay in sales taxes.
You can only purchase items for resale tax-free.
Supplies and equipment used in the business may NOT be purchased tax-free under any circumstances. Claiming them as re-sale items to avoid the taxes is fraud and can even cost you prison time in severe cases.
2007-05-16 14:53:43 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
No, taxes are due unless you're buying the items for resale. If you are the end user, you have to pay the sales tax.
In any case, your ein would not be used in this case. You'd show a form issued by the state that you're authorized to resell products and collect sales tax on them, which you would then remit to the state.
2007-05-16 15:38:18 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
A lot depends on the state in which you reside. As a general rule, you must pay the sales tax on any item which you intend to use in your business. However, if you purchase an item or items for re-sale, again as a general rule you do not have to pay a sales tax. However, you must provide your supplier with your sales tax re-sale identification number and hope that you are not audited by the state. I would suggest that you check with your state sales tax collection agency to be sure.
2007-05-16 11:14:55 · answer #4 · answered by RUSerious 7 · 0⤊ 0⤋
No. Generally, the are no sales tax exemptions for items that you are going to use (equipment, supplies, etc.). Usually, you can only claim a sales tax exemption on items that you are going to resell.
Claiming a sales tax exemption on items that you are going use is considered tax fraud and can get you in a lot of trouble.
2007-05-16 13:21:02 · answer #5 · answered by Wayne Z 7 · 0⤊ 0⤋
Not unless you are a not-for-profit. What you can do is keep track of all the supplies you buy and get a tax break for them on your tax return as business start-up funds.
2007-05-16 11:11:15 · answer #6 · answered by Anonymous · 0⤊ 0⤋