97-079
Response January 16, 1998
97-079
Dear
Irene:
Please
respond in writing to the following question in writing.
FACTS'
Company
A is located in Colorado and has a Colorado sales and use tax permit. Company A
is a
wholesaler
of computer hardware and does not have any representation of any kind in your
state.
Company
A purchases inventory from the manufacturer, Company B, which has a sales and use tax permit in your
state. Along with sales of hardware, Company A also purchases services related
to the hardware from Company B which are sold to Company C who resells the
product and services and collects tax, if applicable, from the final user.
Company A, at the direction of
Company
C, has the hardware drop-shipped from Company B to the final user in your
state.
ISSUES:
1. Since Company A has no nexus in the state of Utah, they are
not required to collect sales tax in your state. Items being purchased by
Company A are for resale, but Company A does not have a Utah taxpayer number to
include in a resale certificate to give to company B. Can Company A issue a
Colorado resale certificate to Company B? If not, what documentation can
Company A issue to Company B in order to satisfy them that the sale is for
resale?
2 Can Company A issue a resale certificate to Company B for
the purchase of services which is being purchased for resale to Company C?
Thank
you for your immediate attention in forwarding a response to NAME at the above
address. Should you have any questions or need further information, please
contact me at XXXXX.
Sincerely,
NAME
January
16, 1998
NAME
ADDRESS
CITY
STATE ZIP
Advisory
opinion - documentation for sales tax exemption
Dear
NAME,
We have received your request for information
concerning the sales tax exemption documents required when Company A, a
wholesaler outside of Utah, purchases inventory and services from Company B, a
manufacturer with a Utah sales and use tax permit.
As a wholesaler, Company A’s
purchase of both the computer hardware and services related to the hardware is
exempt from sales tax under Utah Code Ann. §59-12-104(27). However, Utah Administrative Rule
R865-19S-29(D) requires all vendors who make wholesale sales to obtain an
exemption certificate from the purchaser.
We have enclosed an exemption certificate, Form TC-721NR, for your
convenience.
In response to your first issue, Company A should complete Form
TC-721NR and return it to Company B after each purchase from Company B. On the form, Company A should include its
Colorado sales and use tax permit number.
As to your second issue, the same form can be used to document the
purchase of both the hardware and the services purchased.
Please let us know if you have other
questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner
^^