Your customer wants to purchase goods and have them delivered to their home state of Mississippi. They say they wish to purchase the goods sales tax exempt. Your first response when a customer asks for exempt status is to request a sales tax exemption certificate. When you go to check in your library of documents for the correct form for the customer to complete, you notice the Mississippi library is empty. You check the Mississippi Department of Revenue website, and again find nothing. What does this mean and how should you proceed?
In the State of Mississippi, the burden falls on the seller to prove tax exempt status on the sale. The documentation portion of exempt transactions is governed by MS Code Sec. 27-65-5. The State requires the seller to include exempt information on each and every invoice that is generated. Any purchaser who can provide proof that they are a licensed dealer within the state may claim a resale exemption. This proof may come in the form of a copy of their state issued license, sales tax return, a form or a statement that includes their Mississippi sales tax account number.
Realistically, it helps to have a document to present to your customer. Giving them a piece of paper kicks off the process of them thinking about giving you the correct data. I’ve been using the SST form, as it asks for the purchaser’s state ID and additional information that may be useful. The form is easy to fill out and many purchasers are now used to seeing the format. I have also seen people create their own forms with success. Many times, you will use your own form or the SST form and the customer will just send you a copy of their license anyway. The best solution is to request and collect a copy of the State issued letter identifying that purchaser as a registered reseller. Regardless of the format, collect the information and you are in good shape.
Other recent “Exemption Certificate Mgmt.” posts by Silvia Aguirre:
- Exemption Certificates for Federal Government Purchases
- Marketplace Fairness: What Does It Mean For Exemption Certificates?
- Will Oregon Start Charging Sales Tax? If So - Are You Ready?
- Canada is Bringing Back Exemption Certificates!
- Louisiana Changes State Forms to Include Parish Exemptions
Note: Silvia Aguirre is no longer accepting new comments or questions. More recent "Exemption Certificate Mgmt" posts by Michael Fleming (of Peisner Johnson) are still active. Also use the Site's SEARCH bar to locate other helpful information.