Sales Tax Exemption

That is why you need a good accountant but the government will be more than happy to tell you how to pay your taxes.

 

What about if you pay cash? I just bought a truck about 8 months ago

 

No. The equipment sale is exempt. The monthly filing is just a consequence of having to get the sales tax ID set up in order to use the exemption. Hand the dealer a completed ST-5 and they should delete the sales tax line. You may also get a tax bill from DOR when your title is processed. I just sent another ST-5 back with a copy of the invoice (no payment) and they were good. I think they only do that with private sales, though.

Since you're not selling any retail goods, you just need to remember to file a short return every month. Since you (likely) are only selling a service that's not taxable, you'll report your monthly sales and also put that same amount in the exempt category for a tax due of zero. Click submit and you're done. The exception would be if you sell any goods at retail. For example selling equipment or surplus gear. If you sell to anyone but another retailer, like the guy that answers your craigslist ad, you will need to collect and pay sales tax or get their ST-5 for an exempt sale.

 

One more thing: after you've had a year or so of on-time zero sales tax returns, call the DOR and ask if you can be changed to a yearly filer. They will do that in cases like a motor carrier that routinely collects no sales tax to be paid in.

Also, don't forget that monthly return. Easy to do if you're only on the tax system quarterly for IFTA. They do charge a late fee if you forget, even if there is no tax due. Trust me, they add up LOL.

 

Sure would be nice if we got an tax exemption here in AL.. The best way to sell equipment is get cash fold neatly and put in pocket forget forms.

 

Truck, trailer, or any part of it is exempt. However, there is Federal Excise Tax due on brand new stuff, and obviously separate from state sales tax.