Expert: Ed McFarland - 6/1/2004

Question
Hi Ed. I am starting a beverage manufacturing business, and I wanted to know if the raw materials that I purchase for use in the beverage are taxable.  In other words, when a vendor sells me citric acid, do I have to pay the vendor tax on that purchase, or am I exempt from tax since the material will be a component of a product that I will sell (both wholesale and retail)?

Thanks, Ed.

Jim

Answer
Check with your tax juristriction about exemptions for resale.

You may need to get a registration or have to apply for rebates depending the rules.

In Massachusetts, it's a certificate for resale. In California, there are no exemptions unless you are the Federal government.

Find out the rules and keep accurate records.

Good luck.