See if there are any tax people that can answer this. I am in Utah. I have a small business and I have a sales tax license, and I am set up for retail sales. I need to file my quarterly sales tax return, for $119.96 in sales last quarter (I know, I am just starting). My question is this, I purchased items for resale in this same quarter and paid sales tax - is there someway to claim a credit for this on the sales tax return?

Thanks
Blake

Blake:

I am addressing this using the generally-accepted sales tax provisions available in most states, because I do NOT practice in Utah.

If you purchased an item for resale, you SHOULD be exempt from paying sales taxes on that item when you make the purchase. If you failed to specify that the item was for resale and, as a result, paid a sales tax, I suspect that there is NO credit available to you.

With my sales tax license, items purchased for resale are tax exempt. I assumed that I could claim a credit, so I didn't set up tax-exempt accounts with all my suppliers. I know that you should never assume when it comes to the IRS.

Blake:

Sales taxes are NOT administered by the IRS. They are administered by the state, in your case, Utah.

Thank you for your help Atlanta, On my sales tax return form, there was a spot for adjustments. I recorded my purchases that I paid sales tax on in this adjustments spot. I may have done it wrong, but it calculated out too what I figured were correct numbers. I guess if I did it wrong, the state will reject it and make me do it right. I had to explain my adjustment when I did it. I explained it as excess tax collected: income tax paid on products purchased for re-sale. I'll post if the state found this acceptable or not when I know.

Blake-Utah