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Jonathan Tierney
Jonathan Tierney, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 322
Experience:  Tax Accountant at Praxair, Inc.
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As a small Nevada incorporated IP Co. with one employee

Customer Question

As a small Nevada incorporated IP Co. with one employee operating out of a sole brick and mortar admin office in Michigan, we are contracting a third party in Florida to produce an OTC itch creme similar in appearance to "Cortizone 10" for sale to an out of state distributor. Our IP is comprised of the patents by which the creme penetrates into the deeper layers of the skin.
After production, product is picked up at the manufacturer's dock by the independent reselling distributor. We are trying to provide the manufacturer with a sales/use tax exemption certificate for the first part of the transaction. Who would the corporation approach for application and acquisition of this exempt certificate? Product never "touches down" in Michigan.
Submitted: 2 years ago.
Category: Tax
Expert:  Jonathan Tierney replied 2 years ago.

Hi, my name is ***** ***** my goal is to provide you with the most complete and accurate answer possible.

If you have an employee in Michigan, should have registered to do business there and as part of the process you are normally expected to register to collect sales tax. Your sales tax registration number is ***** resale number that you can provide to the person you purchase goods for resale from. If you do not have a Michigan sales tax certificate, you can obtain the forms to obtain one through this link:

The other state you could try to obtain a resale certificate in is the state where the goods are produced, as you would also be considered to be doing business in that state since you own property in that state.

I should also mention that if you are selling the products to the distributor, the distributor should be providing you with a copy of its resale certificate, since once you are registered for sales tax, you will be expected to collect/pay sales and/or use tax. When you file your sales tax return, you would report the sales to the distributor as "sales for resale" and they would not be taxable.

I hope this answers your question. Please let me know if I can clarify anything or answer any additional questions. Thanks, Jonathan