Business glossary
Sales tax exemption
A legal exception allowing a qualifying buyer or transaction not to pay otherwise applicable sales tax.
Example
A qualifying customer or transaction may be exempt under a particular state's rules. Keep the evidence supporting the exemption and apply it only to the relevant transaction.
How it differs from related terms
A customer saying it is exempt is not the same as having the required exemption documentation. An exemption, a resale purchase and a zero tax rate can have different bases; consult the responsible authority.
Frequently asked questions
What is an example of sales tax exemption?
A qualifying customer or transaction may be exempt under a particular state's rules. Keep the evidence supporting the exemption and apply it only to the relevant transaction.
How should sales tax exemption be interpreted?
A customer saying it is exempt is not the same as having the required exemption documentation. An exemption, a resale purchase and a zero tax rate can have different bases; consult the responsible authority.