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| Sales and use tax. |
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| Sales and Use Tax
Think of "sales and use" taxes as being comparable with the UK's Value Added Tax, but with some "plus points."
We use Florida as an example because that is where the majority of ExportAction clients are incorporated, headquartered and trade. We use "you" to simplify the subject.
Florida law mandates a minimum sales and use tax rate of 6%. There are also provisions for counties to set their own local tax, meaning at present you could have to collect as much as 7% from your Florida-based customers.
Government entities, religious organizations and non-profit organizations are exempt from paying and, therefore, you from collecting sales and use tax.
When you sell to organizations outside of Florida, they may (almost certainly will) have a responsibility to pay a use tax. That is their responsibility, not yours.
Also, if someone purchases your products for re-sale, they are exempt from the sales tax (which will fall on the eventual buyer/user). This would apply to your resellers.
Inevitably, there are some fine points: use tax is due on purchases made out of state and brought into Florida within six months of the purchase date; a product bought with plans to resell the item (therefore exempt from the sales tax) but ending up being used requires payment on the use tax on the item; materials purchased to produce a product which are not part of the end product (anything from manufacturing equipment in a factory to a mixing spoon in a bakery), incur a use tax on the item.
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