When a buyer asserts their tax-exempt status during the removal process, additional steps are necessary to ensure smooth payment processing and invoice management within Equip-Bid.
At the Removal
- Documentation: Buyers must furnish or complete the requisite documentation for their tax-exempt status, adhering to the regulations of the state where the auction is conducted. For auctions held outside of your state, consult the respective state's department of revenue for applicable procedures.
- Eligibility Responsibility: Purchasers are responsible for determining their eligibility for tax exemption and may be held accountable for any associated taxes, interest, or penalties if ineligible items are purchased. Sellers are relieved of tax collection duties upon acceptance of a fully completed exemption certificate. It is advisable to keep a supply of blank forms available for buyers lacking their own documentation.
- Payment Processing: Tax-exempt buyers will remit payment based on the pre-tax subtotal indicated on their invoice, accounting for any applicable discounts or non-discounted amounts based on their chosen payment method. Clearly annotate the actual amount paid and affix the exemption form to your copy of the invoice for record-keeping purposes.
Processing Invoices
- Invoice Labeling: Invoices for tax-exempt buyers should be appropriately labeled to ensure accuracy in your Close Report and Sales Tax Report within Equip-Bid. This designation can be adjusted from the List Invoices page by selecting the relevant invoice(s), clicking the Tax button, and opting for "Set to Tax Exempt."
- Verification: The Tax Exempt column on the invoice(s) will be marked with a green checkmark to signify the tax-exempt status.
Notes on Out-of-State Buyers
- Tax Applicability: The physical location of the auction removal site dictates the applicability of sales tax, irrespective of the buyer's state of origin.
- Exemption Documentation: Legitimate tax-exempt buyers from out-of-state must still provide or complete the exemption documentation as required by the auction's state.
- Out-of-State Shipment: For items slated for out-of-state shipment, sales tax typically does not apply. However, buyers are responsible for complying with their state's regulations regarding reporting sales and use tax for out-of-state purchases.
These guidelines aim to facilitate seamless interaction with tax-exempt buyers, ensuring compliance with state regulations and accurate financial reporting within Equip-Bid. For further assistance or inquiries, affiliates are encouraged to refer to relevant resources or seek support as needed.