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Can we use our IL exemption Tax ID number in the state of RI for Drop shipments? We are not registered and do not have nexus in RI.

Full Question: Hello, can we use our IL exemption Tax ID number in the state of RI, for Drop shipments? We are not registered and do not have nexus in the state of RI.

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Answer:

Diane Yetter photoFor Drop shipments when the retailer is not registered in the delivery state, most (but not all states) permit the manufacturer who does have nexus in the ship to state to accept alternate documentation to substantiate a sale for resale to the retailer. This can take the form of the home state resale certificate, the delivery state resale certificate with notations or information about the home state registration number, the Multistate Tax Commission (MTC) exemption certificate with the home state registration number, the Streamlined Sales Tax Exemption certificate with the home state or other registration number or an affidavit of no nexus. The state of Rhode Island is one of the states that will accept alternate documentation. They will accept your IL resale certificate, the MTC certificate with an IL number or the Streamlined Certificate with another registration number. For more information about drop shipment rules, please visit http://www.yettertax.com/published/drop-shipments-taxation-compliance-and-planning-2012/ for information about a drop shipment publication we authored.

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