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Conducting non-taxable sales

Learn how to determine if your sale is exempt from tax.

While most items and transactions are taxed, some aren't. Generally, you're not required to collect sales tax for the following items.

Note: Always check with your individual state tax authority as to which goods and services are subject to sales tax.

 

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 non-profit organizations

Sales made to non-profit organizations are normally exempt from sales tax. If you're involved in these types of transactions, you'll need to get a copy of the buyer's tax-exempt certificate or number (issued by the state they're in).

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