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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13314
Experience:  15years with H & R Block. Divisional leader, Instructor
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I have a long term lease with a Town in Massachusetts. The

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I have a long term lease with a Town in Massachusetts. The lease required me to design build and operate a golf course and clubhouse. The LLC that I set up to operate the Golfcourse and the Corporation that I built the golf course under have been granted tax exempt status. In other words, the Town has provided me with an st-5 form naming my companies as tax exempt when making qualified purchases for the leased property. In addition to tax exempt status, I am aware of Vendors that have won bids with the state to sell their products at the "state bid price" Usually this is a preferred price compared to retail or even corporate discounts. Running a golfcourse and making regular capital improvements to the property are very expensive. So far, i have not been able to get my vendors to offer me state bid or state contract pricing. How can I gently prod them to provide this information that I am entitled to? I would think that they should provided me with their winning bid results and that I can purchase from their state contract pricing.

Robin D :

Hello and thank you for using Just Answer,
The fact that you are sales tax exempt is totally different than be allowed to purchase at the state bid pricing that may be offered to the gov't entities.
In order to make tax-exempt purchases, usually a copy of the State's certificate of exemption must be presented to the vendor. Your LLC is not a part of the town that has issued you the lease.
Unfortunately unless you can buy through the city and have your purchases tallied under their buying the vendors do not have to do anything except accept your sales tax exemption.


Robin D :

I know you were hoping for a different answer and a way to receive the benefit you feel you are entitled to. I sincerely XXXXX XXXXX could tell you that there is a way to receive your purchases at the lower rates.

Customer:

OK, My LLC is for private profit and not for State benefit, but what if I make capital improvements that the Town will benefit from for example improve a public way with asphalt and drainage for mutual benefit. I can argue that if a vendor has a concrete contract with the Town or an Asphalt contract that somehow the asphalt should be purchased at the state bid price. My best route must be through the Town's procurement department and through the Town in general. But how can I find out if the vendors I am speaking to hold a contract for the items I am requesting if they are unwilling to disclose? Is there a user friendly website that I can go to, to find out? Is the information readily available at the Towns?

Robin D :

Bids are generally listed on the website of the individual city. You could use your argument but it does not appear to really fit into the area you want.

Robin D :

Again you are not the city nor an agency of the city.

Robin D :

I sincerely XXXXX XXXXX could tell you differently.

Customer:

What are some examples of agencies of the city?

Robin D :

Parks and recreation, Law enforcement, Finance, council, coronor, engineering,

Customer:

I would like to see how those "agencies" are distinguished from my operations. I also have contracts with municipalities where I collect trash and maintain ballfields.

Customer:

My ballfield maintenance contract is under the parks department.

Robin D :

You are a for profit LLC, you can have a contract with the department but you are not a part of that department

Robin D :

if the department made the purchases for you to use...............

Customer:

Ok, I'm a little slow, but I'm starting to get it.

Customer:

I see.

Robin D :

I hated to be so blunt but..............

Customer:

Please be blunt.

Customer:

I left my ego at home.

Robin D :

Those companies will offer a lower bid price to the city because they are going to order more or they have a contact

Robin D :

you are just one company that may or may not continue to order

Robin D :

look at like the difference in retail and wholesale prices

Customer:

How about a special 60 year contract that required 2/3ds vote from the state legislature and Town Meeting approval

Customer:

Thats my special case.

Customer:

I'm in it for the long haul.

Robin D :

Again it is a contract under that agency or department and not an agency or department itself

Customer:

Not too many projects in the state like this one.

Customer:

OK

Robin D :

I can see the special =circumstance

Robin D :

You would be better off trying to get the department to purchase for you

Customer:

I will try to purchase through the related agencies and then reinburse.

Robin D :

They may do that

Customer:

Thanks for your detailed responses

Robin D :

Best wishes

Robin D :

I really enjoyed working with you – please feel free to request me again when you come back to ask another question.

Robin D :

Your positive rating is always thanks enough.

Customer:

For my next unrelated question: Do you know anything about depreciation and bonus depreciation?

Customer:

I will start a new question

Customer:

but I was wondering if I should direct it to you

Robin D :

Yes and you are correct that is a unrelated question. You must have read the user agreement. :)

Robin D :

You can if you want.

Customer:

OK here it comes with 100 percent for this response.

Customer:

Thanks

Robin D :

You are most welcome

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