– Hey guys. All right, so you’re gonna
look to buy ingredients online, you’re going to get them in
bulk, and you wanna produce a food product. Now, can you get sales
tax exemption for that? Because, in a big big way,
you can save a lot of money if you make sure you don’t
double up on your taxation for your food ingredients. So I’m gonna discuss the
differences, and how that works, and, explain to you how you
can apply for that sales tax exemption right now on
Marketing Food Online. (techno music drumbeats) All right, so I wanted to
do this video really quick, sorry it’s a little impromptu. I’m in my office, and I just
thought I would hurry up and get this video up and out. I had promised a handful
of subscribers to do it, so, I wanted to just get
it out, and the information I’m gonna give you, I’m going
to get right to the point. So, there is a sales tax
exemption, and what that means is, bottom line, if you are
purchasing a product, and then you are going to use it to produce
another finalized product, and sell to a customer, you
need to not pay taxes on that. You don’t collect taxes
or pay on it twice. If you buy an ingredient at a store, let’s just say Walmart, okay. And you went there and you
bought a big 10 pound bag of flour and you’re making cookies. You could get an exemption,
so when you go through the register, they don’t charge
you sales tax on that product, because the state sees it
as, you’re going to produce a final product, and when
it’s sold within your state, you, the manufacturer, are
going to collect the sales tax on the back end of the product, okay? That’s a real basic example
of sales tax exemption for a manufacturer. Now, the other one is
actually a re-seller. So let’s say you were in
the clothing business, and you bought a whole bunch
of sweaters at the local store, and you wanted to mark
them up, and make a profit, and sell them, but you’re not exactly manufacturing the shirt. That is a re-seller exemption. So when you go through the line
again, very similar concept, when you go through the line,
and you purchase the sweaters themselves, because you
are looking to resell them, that is a re-seller’s exemption, okay. So the idea is this. You don’t want to pay your
tax, okay, at the register when you buy it, and then
collect tax when you sell it. The idea is to do it once,
and if you are manufacturing, you would be getting an exemption
as a manufacturer, okay. Now, every state has a
different kind of a process, if you will, to apply for
it, but it’s not very hard, it’s not difficult, and
it’s not something that is that hard to maneuver
through all of the red tape. Basically what you’re looking to get is a sales tax certificate registration. Sales tax registration certificate. That is what I got in order
to operate our business, and what that certificate
actually tells me, as the business owner,
my responsibilities are, is I need to collect sales
tax when I sell something in the state that I’m in, okay. Now, with the new Supreme Court
ruling, if I’m not mistaken, that happened just recently,
online commerce is now going to charge taxes and collect
taxes if you sell a product, and let’s say, you are in
Florida, and you operated a business, and a guy in
Colorado bought something from you, you have to collect
sales tax on that transaction. That’s a whole ‘nother video,
I don’t want to get too deep into that right now, but
the idea for the sales tax exemption, let’s just keep
it within the state, is, that I’m gonna produce a product,
and I will collect the tax and then send it in to the state, okay. The Department of Revenue,
within your state is responsible for collecting the money
from you, the business owner, on behalf of that
transaction, and the amount, whatever that is, of course,
every state has a different percentage of sales tax, you
need to make sure that you collect that sales tax, okay? So at the end of the day,
making it very short and sweet, and this is to the point,
yes, if you own a business, I would highly recommend,
obviously, you need to apply for the sales tax certificate, but, apply for also, and bring
in, I believe it’s the ST-5, I’m looking down at my
computer, ST-5, I believe is the document, and
I’ll double check that, and that is what you would
bring to the retailer, so, again, let’s just use
Walmart as an example. If you buy bulk sugar, or
flour, or buy eggs, or just milk in bulk to produce a lot of baked goods, if it’s a local store that
you get it from, because maybe you’re starting small,
and you’re in a local market, under the Cottage Food law, let’s say, you’re gonna go there, and
they’re going to give you a card, and that card is
gonna be issued by that store, on behalf of Walmart,
and that will allow you to get exemption from having to pay taxes. Now, the question that I got
just recently that motivated me to make sure I got this
video up as soon as possible, was from one of my subscribers,
and it was actually the question of, hey, if
I buy an ingredient online in another state, can I get exemption from that company, let’s
say I got a great deal on corn syrup for some candy,
and it was in Colorado, and I lived in Florida, and I
bought that from that company in Colorado, can I get
a sales tax exemption? You would need to contact, excuse me, you would need to contact the business you’re buying it from, and
let them know that you have in your state, you have
a sales tax exemption, so how can I apply for an
exemption with your company, because I’m gonna be
buying corn syrup, or flour from you all the time, and
I’m not wanting to double up on the taxation for the ingredient, okay. So double check with them,
and ask them specifically what is the process for getting
your sales tax certificate to be valid and recognized
on behalf of where you are in your state, to get an
exemption when you buy from them. Most of the time, companies will allow you to get that exemption. I know there’s a packaging
company that I buy from, they actually have a presence,
they have a physical address presence in this state, and
I get an exemption from tax when I buy from them, and
of course, they do charge for shipping, but I can’t get
an exemption on their shipping but, the taxes, they don’t
charge me because they have a physical presence in the
state, and they know that what I’m getting, the gift
boxes, or the candy boxes, or anything that is used to
create a finalized product, is something that I won’t
pay taxes on, I’ll actually collect that at the sale, okay. So I hope that explains it really briefly, and kind of to the point. Make sure, number one,
you are incorporated, and then file for a sales tax
certificate of registration, and, excuse me, and then you want to make sure that any of the surrounding area of the stores you go
to, if you go locally, to buy an ingredient,
maybe you buy something at a restaurant depot, or some
type of food service depot, maybe it’s near you, or in
your city, make sure you show them that you are not
going to pay tax up on that. Now, really quick tip, and
this is actually quite, this is pretty cool,
to be honest with you, if you are incorporated,
let’s say you’ve been in business for about a
year or so, or longer, and you’ve actually been
paying taxes on ingredients and such to create your
finalized food products, under your business, okay, some states, and of course,
every state is different, you need to contact your
Department of Revenue. Some states will back date
the sales tax that you have purchased, and
give you back the money that you’ve paid up until a certain point. Don’t quote me on a dollar
amount, because every state is different, and, the
time frame is different. Some states will go back
six months, and say, hey, you know what, if you paid
$100 worth of sales tax, they’ll give you that money back, just show them that you’ve
actually been paying on this when, in reality, you
should have been getting the tax exemption, okay. So it’s a really cool thing. I actually took advantage
of that, I was able to call my state’s Department of Revenue, and they actually go back
three months, but, hey, three months is three months. It wasn’t thousands and
thousands of dollars, but it was a pretty good thing. So, they’ll go back a certain
time frame, and literally give you back the sales tax you paid out for those ingredients. So, a couple really quick
tips, and really good things to think about, and double check on that, again, with your state. But follow those tips,
go through their process, and remember that you have
to, as the business owner, you have to speak up,
you’ve got to talk to these businesses that you’re
buying from, and say, look, I’ve been paying sales tax,
I need to give you this, I don’t want to double up on
paying, et cetera, et cetera. So, try that out, and if you
have any other questions, again, as always let me know
down below, and I will get to it as soon as I possibly can. And I’ll see you on the next
video, and I wanna thank you guys, by the way, I’m nearing
almost 5,000 subscribers on my channel, and it’s a
big, big, motivator for me to continue to give you guys
information and help you develop your food product,
and your food business. I always appreciate the
feedback, whether it’s good or bad, feedback is
feedback and I love it, and I always appreciate
everything you guys give me a thumbs up, and a lot of positive pats on the back, if you will,
virtual pats on the back. So, I’ll see you guys on the next video, and remember, if you have anyone
that you know, by the way, a family or friend who
can benefit, as always, from my video, or my channel,
please send it to them, and let them know. I’ll see you on the
next video, thanks guys.