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Sales Tax Ruling: South Dakota v. Wayfair, Inc       Reference: Avalara.com July 11, 2019

"Sales Tax Rules: How does this affect my wholesale purchases"

Background: "On June 21, 2018, the Supreme Court of the United States ruled in favor of the state in South Dakota v. Wayfair, Inc. The decision allows states to tax remote sales. . .It used to be that states could only tax sales by businesses with a physical presence in the state. Now economic activity in a state — economic nexus — can trigger a sales tax collection obligation. Economic nexus is based entirely on sales revenue, transaction volume, or a combination of both. "


The good news: This ruling will not affect Wholesale Purchases that are for the sole purpose of re-selling. Wholesale products that are re-sold by the "buyer" or are a component of an item that is re-sold or taxed, does not require payment of sales tax when purchased from a wholesaler. Most of the products sold at JB Products Corp are purchased by "buyers" who re-sell the product or the item purchased is a "component" of an item that is re-sold and taxed (e.g. Labels to be applied on Kegs, Bottles, Cans, etc..). That means if you purchase a product and re-sell it in your store, we do not have to collect sales tax. However, in order to comply with state and local tax laws and qualify for sales tax exemption, JB Products Corp must collect a properly executed resale certificate, exemption certificate or other equivalent documentation to keep on file for any customer who claims exemption from state and local sales & use taxes.


Please keep in mind that Wholesale products for sole use of the "buyer" may require the "buyer" to report "Use Tax" to the state in which the "buyer" resides. If you have any questions, please Contact Us , visit our FAQ's page and contact your local state sales tax office.

Disclaimer: This article is for informational purposes only and not for the purpose of providing legal advice or tax advice.



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"Remote seller nexus by state, as of  July 11, 2019" (Report and Image by Avalara.com)