Can a LLC be tax exempt?

Question

I am a new LLC business and I was wondering with me being a reseller, do I qualify for tax exempt?

Answer 1

You apply for a sales tax license from your state.

You can then purchase items that are to be resold tax exempt.  You must provide a copy of your exemption form to the seller.  These form names and numbers vary by state so, without knowing what state you are in, there is no way to tell.

You will have to collect sales taxes from all sales within your state.  You will also have to file a sales tax return with the state and remit the sales taxes in a timely manner.

Note:  The resale exemption only applies to items that you directly sell to your customers.  It does not apply to items that you will be using to conduct your business.  For example:   If you are selling pop to your customers, you can purchase the pop tax exempt.  However, you must pay sales taxes on the cooler that holds the pop.

Answer 2

As a reseller you should be able to buy goods for resale without paying sales tax.  An LLC is a profit maing entity like any other.  As a single owner you are normally treated the same as a sole proprietor.

Answer 3

You may qualify for to buy merchandise for resale tax free by issuing a resale certificate.  First you need to get a sales tax permit.

You will not be a tax exempt organization: that is for schools, churches and charitable organizations.

You will also need to file a Form 1065 with IRS unless you are a single member LLC.  A single member LLC is a 'disregarded entity' so you file just like a sole proprietor using Schedule C and Schedule SE and Form 1040

Answer 4

It sounds like you are not talking about being exempt from income tax, but rather from sales tax.

In most states, yes, as a re-seller you collect tax on retail sales rather than paying it upon purchase. However, this does not exempt any items that you ermove from inventory for your own (or the LLC's) use. In this case it is called "use tax" and is assessed at the same rate as sales tax.

Answer 5

For sales tax, contact your state and request a sales tax id and instructions for remitting the tax you collect, and a reseller's certificate.  You are only exempt from sales tax on items you buy for resale, where you'll collect the tax from the buyer and send it in to the state.