Reseller Certificate in California

[hydeisland]

Hey guys, I have a nice boring accounting question. I am trying to get in with a pv distributor as they can provide me with leads and lots of work. As I went through the application process and was talking with the rep they asked for my reseller certificate number. I was kind of blind sided and quite frankly embarrassed as I didn t have one and didn t really know what it was. After some research I see it is a way to not pay sale taxes then collect the sales tax from the customer and pay the state directly myself. I ve never done this before, I ve always just payed it myself then charged my customers accordingly. It seems like a headache and just more paperwork to do it this way. Does anyone else do this? Have I been ignorant this whole time? Keep in mind my company is new (less than a year) and small (2 men including myself).

 

[cadpoint]

http://www.boe.ca.gov/info/reg.htm if not to your liking; google the phrase

california reseller certificate number with results like this here

 

[Fulthrotl]

Hey guys, I have a nice boring accounting question. I am trying to get in with a pv distributor as they can provide me with leads and lots of work. As I went through the application process and was talking with the rep they asked for my reseller certificate number. I was kind of blind sided and quite frankly embarrassed as I didn t have one and didn t really know what it was. After some research I see it is a way to not pay sale taxes then collect the sales tax from the customer and pay the state directly myself. I ve never done this before, I ve always just payed it myself then charged my customers accordingly. It seems like a headache and just more paperwork to do it this way. Does anyone else do this? Have I been ignorant this whole time? Keep in mind my company is new (less than a year) and small (2 men including myself).

shot in the dark.... is the PV reseller the one that we discussed here:

http://forums.mikeholt.com/showthread.php?t=139222&highlight=

as for the resale number, i had one for two years, and turned it off.
unless you really need it, it's a pain in the butt.

 

[hydeisland]

shot in the dark.... is the PV reseller the one that we discussed here:

http://forums.mikeholt.com/showthread.php?t=139222&highlight=

as for the resale number, i had one for two years, and turned it off.
unless you really need it, it's a pain in the butt.

No it s not them. It's a company called dc power-systems they're a pretty large supplier, met them at the NECA convention. I have realized though you have to be very cautious when dealing with companys and individuals in the pv industry. Since it is so new and there seems to be lots of money flowing into from subsidies,rebates, grants and such that it is prime target by scam artists.

As for the reseller number I went and got one just for the sake of these guys. I have a feeling though I won' t be using it very much.

 

[kwired]

What you really need to do is talk to an accountant or someone up on the sales tax codes where you live.

Do you need to charge sales tax on what you sell?

Does the items you sell depend on what they are used for or where they are installed to determine if sales tax is to be paid?

Do you frequently sell to government or other tax exempt organizations?

Are sales of items that become real property taxable?

Are items sold when performing service work taxable?

If you can sell something for less because you did not have to pay sales tax when you purchased it it could be an advantage for winning bids over competitors that did have to pay tax.

These are all questions that may effect your decision of how to proceed. There may be more than this list of questions to consider.

The form they are asking for allows them to not charge you sales tax if you are qualified to be exempt.

 

[Sierrasparky]

If you sell projects only on a lump sum basis you do not need a resellers permit.


If you buy as a reseller with tax permit.The tax is on the re-sold price. This will make your price greater then the other guy who does a lump sum.


The only issue is if your supplier can pay the tax when you make the purchase. Some wholesalers do not!

 

[kwired]

If you sell projects only on a lump sum basis you do not need a resellers permit.


If you buy as a reseller with tax permit.The tax is on the re-sold price. This will make your price greater then the other guy who does a lump sum.


The only issue is if your supplier can pay the tax when you make the purchase. Some wholesalers do not!

The supplier must charge you tax if they are selling items that are taxable according to the tax laws. For them to not charge tax they will want an exemption certificate on their files.

Whether or not you as a contractor pays, collects, or maybe even a little of both is dependant on what is taxable, who is considered the final consumer.

It is best to know what the tax laws are where you operate, for you and your customers.

 

[petersonra]

The rules are different in different states. Some states you are required to add the sales tax on parts sold. Other places you can pay the sales taxes when you purchase the parts and just include it in the price.

 

[Sierrasparky]

The rules are different in different states. Some states you are required to add the sales tax on parts sold. Other places you can pay the sales taxes when you purchase the parts and just include it in the price.

If you mark it up you need to pay rh tax on the new price.

If it's a lump sum price that includes parts and labor. Pay the tax at the supplier and be done. Otherwise you will be subject to tax on the entire amount.

 

[kwired]

The rules are different in different states. Some states you are required to add the sales tax on parts sold. Other places you can pay the sales taxes when you purchase the parts and just include it in the price.

Here it can be done either way - on things that become annexed into real property, which is most of your new construction type stuff. Service/repair work can be different, things that are just sold but are not installed are basically retail sales and final sale amount is the taxable amount. For the things that become annexed into real property like I mentioned can be either way, but you must decide which way you are going to do it when applying for a sales tax ID and you must always do it that way. You can probably change your mind which way to do it but that is not something you will do frequently - maybe only once or twice in the life of the business at the most.