What's the difference between: TX Sales & Use Tax Exemption Cert. and TX Sales & Use Tax Resale Certificate?

Question

I'm confused....It's for good we buy to manufacture a final product which will be sold.
We are a custom manufacturer.
Please help. Thank you.

Answer 1

The TX sales & use tax EXEMPTION certificate is given to the seller by a purchaser who is EXEMPT from the tax, such as a charity that has been granted a sales tax exemption by the state comptroller's office or a farmer who is buying product under an agricultural exemption.

The TX sales & use tax RESALE certificate is given to the seller by a purchaser who is buying product to resell, such as in your case as a manufacturer you buy supplies and materials that go into your product that will be sold. If you sell to the end users you will collect the tax and pay it to the state comptroller, but the tax does get collected somewhere in this transaction. In the exempt transaction it never gets collected or paid.

If you sold to retailers instead of end users the retailers would give you a resale certificate so that they didn't pay tax when they purchased your product from you and they would collect the tax from their customers and they (the retailer) would pay the tax over to the state comptroller's office in Austin.

Answer 2

The exemption certificate is issued to organizations that are tax-exempt such as churches.

The resale certificate is issued to any retailer who is required to collect and render sales taxes. The goods that they purchase for re-sale are not subject to tax. The goods that they purchase for use in their business such as office supplies, equipment, etc. ARE subject to tax.

Answer 3

The state sales tax is 6.25%. the quantity you pay to the county varies. the optimal volume of county tax is two%, making the entire tax 8.25%. in case you like to confirm, call the Texas State Comptroller's workplace or circulate to their internet site.