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Out of state retail certificates?

by Lavar Greene
5 replies
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Hello everyone,

I just created my first Shopify dropshipping website and just received my sales tax license for the state of New Jersey.

I found a supplier that I wanted to work with, BBCW Distributors that is based in Florida and I'm not sure if they will accept my NJ resale certificate because Florida is one of the states that do not accept out of state certificates.

I do see form ST-3NR which is the resale certificate for non New Jersey sellers but I'm not sure if this is the correct resale certificate I need.

Does anyone know what I should do?

Thanks!
#certificates #retail #state
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  • Profile picture of the author jmosticc22
    I think as long as you have the ST-3NR you have the correct form to be exempt from tax. Your distributor from Florida doesn't need to "accept" it, it is for the state of NJ allowing you to be exempt from sales tax as long as you are buying products to resell which would apply to what your are doing.
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  • Profile picture of the author dave_hermansen
    Keep in mind, however, that if you apply for such a certificate, it requires you to collect and remit sales tax for all customers in Florida. That's not only a hassle, but you could lose sales from customers who live in that state.

    We have plenty of suppliers in states, such as Florida, that do not accept out of state certificates, and none of them have required one for that state. I'm not sure what they are doing, but they are likely passing the sales tax onto us and are working it into their "wholesale" price without actually itemizing it on our end.
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    • Profile picture of the author lastreporter
      Originally Posted by dave_hermansen View Post

      Keep in mind, however, that if you apply for such a certificate, it requires you to collect and remit sales tax for all customers in Florida. That's not only a hassle, but you could lose sales from customers who live in that state.

      We have plenty of suppliers in states, such as Florida, that do not accept out of state certificates, and none of them have required one for that state. I'm not sure what they are doing, but they are likely passing the sales tax onto us and are working it into their "wholesale" price without actually itemizing it on our end.
      This is one reason I shut down several of my ecommerce sites. The new tax laws and high cost of shipping, turned my slim margins into slim losses.

      Good job, legislators, you just put thousands of small businesses out of business. Idiots.
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      • Profile picture of the author dave_hermansen
        Originally Posted by lastreporter View Post

        This is one reason I shut down several of my ecommerce sites. The new tax laws and high cost of shipping, turned my slim margins into slim losses.

        Good job, legislators, you just put thousands of small businesses out of business. Idiots.
        Well, that sounds more like you had a bad product niche or weren't really getting wholesale prices from your suppliers than anything else. You shouldn't even build a site if your margins are that slim. Even if you were only getting a 25% markup after shipping, having to "eat" the sales tax at 5-7% for most states is certainly not going to destroy the business model.

        Of course, you know you can also pass the taxes onto the consumer. Plenty of the biggest eCommerce websites out there do - Amazon, Walmart, BestBuy, HomeDepot, etc.
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  • Profile picture of the author maraby
    I just created my first Shopify dropshipping website and just received my sales tax license for the state of New Jersey.
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