Managing Exemptions and Resale Certificates

Learn best practices for more efficient handling of exemption certificates at every step of sales tax compliance.

Determining eligibility for sales tax exemptions and navigating the application process can prove to be difficult for taxpayers who do business in multiple states and jurisdictions. For example, states have different application processes and requirements regarding exemption certificates. This topic will help you understand the difference between an item that is excluded from sales tax versus an item that is exempt from sales tax, and the associated burden of meeting this under judicial scrutiny. In the context of sales tax exemptions, you will learn the three main categories of exemptions: use-based, product-based, and buyer-based exemptions. Further, the information will walk you through the often complicated process of applying for an exemption certificate and the proper information that must be completed in order for a seller to be eligible. Lastly, while there are certain general rules and guidelines applicable to most jurisdictions, state and local jurisdictions have nuanced rules and exemptions that do not apply everywhere. Consequently, this topic will explain the sourcing rules and assist you in identifying the proper jurisdiction certificate in the context of an interstate sale. Compliance is critical in today's business environment. Learn some best practices to better equip your business to be aware of changes and to be in a position to support your books and records under audit.

Learning Objectives

• You will be able to differentiate between an Exemption and an Exclusion.
• You will be able to identify the various types of exemptions.
• You will be able to understand the differences between the exemption types.
• You will be able to identify the proper steps in completing an exemption application.