Learn how to determine if your sale is exempt from tax in QuickBooks Online.
Learn about tax-exempt items
Generally, you're not required to collect sales tax for the following items:
- Resold items: Retailers don't typically have to pay sales tax on wholesale purchases. It's assumed that the end consumer will pay sales tax on these items at the point of purchase.
- Raw materials: If you produce and sell goods that will be used as raw material for other goods, these items are typically considered sales tax exempt.
- Transactions with nonprofit organizations: Sales made to nonprofit organizations are normally exempt from sales tax. If you conduct business with tax-exempt organizations, you'll need to get a copy of the buyer's tax-exempt number or certificate issued by the province they’re in.
| Note: Always check with your individual province tax authority as to which goods and services are subject to sales tax. |