Understanding Tax Exemptions and Taxables

Who is Taxable? States often have exemptions or exclusions from sales tax in their state based on the type of purchaser making the purchase. All states allow resellers to claim an exemption for purchases made for resale. ― Most states allow an exemption for non-profit organizations such as churches and charities. These organizations generally are required to be determined as a non-profit organization by the US Internal Revenue Service. Purchases made directly by the US federal government are not subject to sales tax in any states. — Sellers are required to obtain - and maintain - certificates from the purchaser at the time of sale that includes required data elements such as the name and address of the purchaser, the purchaser's sales tax account number and the reason for the claimed exemption. Some states require their specific state exemption certificate Many states will accept the Multistate Tax Commission's Uniform Resale Certificate-but only for purchases for resale: https://www.mtc.gov/Resources/Uniform-Sales-Use-Tax-Exemption-Certificate Many states will accept the Streamlined Sales Tax Exemption Certificate: https://www.streamlinedsalestax.org/docs/default-source/forms/exemption-certificate.pdf KPMG © 2021 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. 12

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