How do I get a Tax Exemption Certificate for export from the US if I am in another country?
I live and have a company in South America. Most of my raw materials are from USA. When I purchase these raw materials I'm paying their cost plus tax. Is that correct?
When I asked my providers why I have to pay taxes they stated that with a Tax exemption certificate I wont have to pay taxes.
How do I get a Tax exemption certificate?
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Assuming you are being charged sales tax, it all depends on where you take possession of the shipment.
Are your suppliers shipping to a US address, say your freight forwarder, from where you handle the ongoing shipment, or directly to you in South America? If the latter, per Michael Pryor's answer, you should not be charged sales tax.
If the former, if the address is in a state in which your supplier has a physical location they will have to charge sales tax. That said, your freight forwarder should be able to furnish your supplier with a letter stating that the goods have been exported (with a copy of the relevant Bill of Lading) which will allow your supplier to refund you the taxes (a company I was at before would allow refunds up to two years past the date of sale per various tax regulations). Alternatively, you could see if just a letter of intent from your freight forwarder is enough to not charge you in the first place, but that's technically not proof of exportation.
You might be able to get a refund or an exception from the state's tax department directly, but I would recommend going through your supplier - much less hassle.
Depends on the state, in Texas you should charge sales tax because the shipment is going to a freight forwarder in Texas. That being said, once you have the bill of lading you can have your tax credited by the vendor. It is one of the documents the state will except in lieu of sales tax for exports. There are five. You can find this info at the Comptrollers website.
I would validate that you are being charged sales/use tax and not withholding tax, withholding would be related to your country.
Doc requirements for export vary from state to state.
How do you know you are playing their cost plus tax?
Retailers in the US currently only collect state sales tax on purchasers who are based in the same state they are in. For example, our business is in NY so we charge NY state sales tax. We do not charge sales tax for anyone living in any other state (or country).
If your shipping address is in South America, the people you are buying from in the US should not be charging you any tax. You may have to pay customs duties and fees, but these are not sales tax.
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