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    4 Replies Latest reply on Apr 5, 2008 9:48 PM by Lighthouse24

    Taxes to operate business

    LariosVox Wayfarer
      Hello to all,
      Thank you for your feedback in advance. Im not in business yet, however im trying to do homework before i make my business plan. Once I begin to operate my Coffee shop business will supplies/materials be tax exempt? I am buying coffee and the works basically is this consider for resell? How do i want to prepare myself for this type of business transaction?
      I welcome all feedback as long as it will make me better with your knowledge.
        • Re: Taxes to operate business
          Lighthouse24 Ranger

          The specific laws and processes depend on the state in which you are located, and your profile doesn't say. To use Texas as an example, however, if you were starting from scratch you'd pay no sales tax on any of the equipment you bought for use in preparing coffee, but you would pay sales tax if you bought chairs, tables, fixtures, etc. for the store. You'd pay no sales tax when you bought disposable items like paper napkins and paper cups, but you would pay sales tax on any non-disposable items like dishes and utensils.

          As for the supplies that go into a product you are reselling (like coffee, dairy, sugar, etc.), in Texas, those ingredients are tax exempt when purchased from a restaurant supplier or grocery store anyway -- but you would charge sales tax when you sold the "ready to consume" products you created from them to customers.

          In Texas (and almost all states), any supplies that are ingredients of a product you resell (if not already tax exempt) can be bought tax free. This usually requires you to have a) a sales tax and use permit, and b) some type of resale certificate or form that you provide to suppliers or complete each time you make a tax free purchase. It's usually easy (and free) to get these once you've formed/registered the business, have a federal tax ID, and a bank account. You can search your state government's website for the specific sales and use tax requirements.

          Hope these examples were helpful. Best wishes.

          1 of 1 people found this helpful
          • Re: Taxes to operate business
            LUCKIEST Guide
            Welcome to this web site. Homework is always good.
            So is SCORE. SCORE is FREE. How soon do you plan on starting this business.
            Are you working on a Business and marketing Plan??
            Lighthouse always gives good answers.
            Go to Members page and add a few words about you and your business
            Good luck, LUCKIEST