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    RDFG's Avatar
    RDFG Posts: 37, Reputation: 4
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    #1

    Sep 15, 2016, 08:15 AM
    Tax Exempt
    I am a business providing a service in the state of Fl.
    My customer is also a business providing a service in the state of Fl.
    He is from another country and he claims his company is tax exempt.
    To my understanding When providing a service in FL. If there are any parts/ supplies/ materials used with the service, I am supposed to charge tax on entire bill including the labor.
    He disputes this continuously.
    Am I correct or is there something I am missing?
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
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    #2

    Sep 15, 2016, 10:21 AM
    You are correct. If he is buying in the state of Florida and providing a service in the state of Florida, and having those items shipped to a warehouse in Florida, then he has to pay applicable taxes same as everyone else. However, if you were to ship your goods to a foreign country, then taxes, aside from duty and any taxes applicable to that duty, would not be charged.
    RDFG's Avatar
    RDFG Posts: 37, Reputation: 4
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    #3

    Sep 15, 2016, 10:23 AM
    Quote Originally Posted by tickle View Post
    You are correct. If he is buying in the state of Florida and providing a service in the state of Florida, and having those items shipped to a warehouse in Florida, then he has to pay applicable taxes same as everyone else. However, if you were to ship your goods to a foreign country, then taxes, aside from duty and any taxes applicable to that duty, would not be charged.


    There is no shipping of any parts to or from the customer. He has a boat rental company in Florida. I have a boat maintenance company in which I care for his boats. Structure & mechanical.
    He feels he does not have to pay taxes on any of the invoices. States he is tax exempt.
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    tickle Posts: 23,796, Reputation: 2674
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    #4

    Sep 15, 2016, 11:26 AM
    No he isn't tax exempt if he is running a business and you are providing services for him. Does he have all of the appropriate business licenses in place ? If not, then he is running a business illegally.

    You should know that you can ask your accountant if this is corrrect, or your business lawyer. Even if you have to pay a lawyer's fee for this information, and a letter sent to him confirming it, it is better then getting stiffed for the money.
    RDFG's Avatar
    RDFG Posts: 37, Reputation: 4
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    #5

    Sep 15, 2016, 12:10 PM
    Quote Originally Posted by tickle View Post
    No he isn't tax exempt if he is running a business and you are providing services for him. Does he have all of the appropriate business licenses in place ? If not, then he is running a business illegally.

    You should know that you can ask your accountant if this is correct, or your business lawyer. Even if you have to pay a lawyer's fee for this information, and a letter sent to him confirming it, it is better then getting stiffed for the money.
    Yes, as far as I know he is legal just very confused. Thinking that he is exempt from all tax's. I have contacted my accountant and she is sending him the information he needs to clarify this. Thank you for your time!
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
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    #6

    Sep 15, 2016, 12:13 PM
    Quote Originally Posted by RDFG View Post
    Yes, as far as I know he is legal just very confused. Thinking that he is exempt from all tax's. I have contacted my accountant and she is sending him the information he needs to clarify this. Thank you for your time!
    Good ! Anytime. We are here, it is, I think, one of the best sites on the internet for this type of assistance.
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #7

    Sep 15, 2016, 12:29 PM
    Anyone in any of the 50 states who claims to be tax exempt has to provide a tax exempt ID.
    The US does have tax treaty exemptions with several countries, but he has to provide the proper documentation, an EIN and W-8BEN, W-8ECI, W-8EXP, or W-8IMY, as appropriate.
    Just curious - what country is his business in?
    RDFG's Avatar
    RDFG Posts: 37, Reputation: 4
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    #8

    Sep 15, 2016, 12:54 PM
    Quote Originally Posted by joypulv View Post
    Anyone in any of the 50 states who claims to be tax exempt has to provide a tax exempt ID.
    The US does have tax treaty exemptions with several countries, but he has to provide the proper documentation, an EIN and W-8BEN, W-8ECI, W-8EXP, or W-8IMY, as appropriate.
    Just curious - what country is his business in?
    His & My business are in the state of Florida. USA He is From Germany
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
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    #9

    Sep 15, 2016, 01:00 PM
    [QUOTE=joypulv;3781633]Anyone in any of the 50 states who claims to be tax exempt has to provide a tax exempt ID.
    The US does have tax treaty exemptions with several countries, but he has to provide the proper documentation, an EIN and W-8BEN, W-8ECI, W-8EXP, or W-8IMY, as appropriate.
    Just curious - what country is his business

    You are confusing this. He is operating out of Florida, so he has to pay applicable taxes.
    joypulv's Avatar
    joypulv Posts: 21,591, Reputation: 2941
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    #10

    Sep 15, 2016, 01:04 PM
    I'm not confused. He can have an entity in the US and be registered in another country. This is common in the boating related trades. Notice all the Panama flags, every time you are on the ocean?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #11

    Sep 15, 2016, 02:31 PM
    The key here is what Joy said. If he is tax exempt then he should have a certificate to prove it. No certificate, no tax exemption. It is as simple as that.
    tickle's Avatar
    tickle Posts: 23,796, Reputation: 2674
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    #12

    Sep 15, 2016, 03:16 PM
    Quote Originally Posted by joypulv View Post
    I'm not confused. He can have an entity in the US and be registered in another country. This is common in the boating related trades. Notice all the Panama flags, every time you are on the ocean?
    No didn't say you were confused
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