I work for a custom home builder. Do basic bookkeeping in quickbooks. Need information on use of Tax resale certificate for homebuilder. How and when to use.
Thanks for any help.
Thanks for any help.
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Are you asking about the state sales tax reseller's certificate?
If so, check with your state's department of revenue for registration requirements and the sales tax laws. There maybe some special rules involving the building trades and when and how they pay the sales taxes on building materials use in buildings being resold. -
Resale certificate
When I worked for the Texas State Comptroller, a contractor usually gave a resale certificate if he segregated the cost of labor and material and charged his customer the tax on materials. He usually segregated charges when he did work for an exempt organization..
If he had a lump-sum billing, he would pay tax when he purchased the taxable items.
If he bought for a construction job for a school or church, he would get an EXEMPTION certificate from the exempt organization and purchase supplies using a resale certificate then resell it tax-free based on the exemption certificate.
Consequently, a contractor almost always paid the tax on purchases himself and billed lump-sum --Unless it was for an exempt organization.
You should check the sales tax laws and rulings of your state in order to best advise your client.Comment
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