(1) |
Raw Materials Are Part of Manufactured Goods If raw materials for the production of food are purchased for the purpose of being used in the production of final consumer goods or part of a manufactured product, the purchaser is not subject to sales tax. For example, any raw material becoming an ingredient or component part of the manufactured article. So, when food processors buy raw materials that will become physical parts of the items to be resold for sale, no sales tax is required. |
(2) |
Levied on the End-User or End Consumer Sales tax is levied on most tangible products and certain services. The levy is imposed on the end-user or end consumer. When selling to grocery shops or supermarkets, no tax is levied on them as long as they provide a certificate that they have obtained a tax exemption or resale, while retaining the supporting documentation. |
(1) |
In California, if you set up an office, sales room, or warehouse, or hire employees and intend to sell or lease tangible personal property, you are ordinarily subject to sales tax if selling at retail. And you must obtain a seller's permit and file sales tax. |
(2) |
If you are a remote seller, you need to consider whether the sales have reached the economic nexus threshold of the state where the sales occur. Once you reach the threshold, you need to apply for a sales tax permit and file a sales tax return for that state. (Refer to Kaizen’s article: https://www.kaizencpa.com/Knowledge/info/id/944.html) |
Disclaimer All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage. |