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A in IL sold machine parts to B in MN. B sold them to C in

WI. Machine parts were...
A in IL sold machine parts to B in MN. B sold them to C in WI.
Machine parts were directly delivered from A to C.

1. For B not to pay sales tax to A, which state’s resale certificate is needed? MN or WI?
2. This resale certificate is issued to which company? B or C?
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Answered in 2 minutes by:
5/3/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

B would have the resale certificate issued in MN since that is where the sales take place

MyVirtualCPA :

C would need a resale certificate in WI if they are planning on selling the merchandise to the public

MyVirtualCPA :

Is there anything else I can help you with? If not, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

Thank you. I have additional question to understand more clearly. If B somehow did not submit resale certificate to A, then A would have to collect sales tax based on which state's rate and make payment to which state?

MyVirtualCPA :

Minnesota

Customer:

Even though machine parts are consumed in Wisconsia, A has to collect sales tax and make payment to Minnesota?

MyVirtualCPA :

A is not selling to Wisconsin

MyVirtualCPA :

A is selling to Minnesota

MyVirtualCPA :

but no sales tax will be due until the item is ultimately sold in WI

Customer:

Even though parts were shipped to WI, sales is made to MN. So sales tax is collected or not collected based on MN resales certificate.

MyVirtualCPA :

No sales tax should be paid to MN

Customer:

If A fails to collect resale certificate from B, Does A have to pay sales tax to MN?

MyVirtualCPA :

No, because the goods were then sold again

MyVirtualCPA :

Only in WI is sales tax due

Customer:

A has to pay sales tax to WI if it has no B's resale certificate? or A does not have to pay sales tax to anywhere?

MyVirtualCPA :

A does not pay

Customer:

Even though A has not collected any resales certificate from B, A does not pay sales tax to any state. Because the sales is not ultimate. Am I right?

MyVirtualCPA :

Correct


 

MyVirtualCPA :

yes you are correct

Customer:

I got your point. Thank you!

MyVirtualCPA :

You're welcome

MyVirtualCPA :

please rate my response "excellent" so that I may receive credit for assisting you today

MyVirtualCPA :

Please try again.

Customer:

OK Thank you very much!

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
16,581 Satisfied Customers
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

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