Simple Steps to Keep Your Print Shop Tax Exempt

Simple Steps to Keep Your Print Shop Tax Exempt | Screenprinting.com

Imagine buying screen printing supplies and not having to pay taxes. What a dream, right? If your screen printing business is a registered LLC, that dream can be a reality. To learn more about what tax exemption is and how to obtain it, continue reading.

Screen printers who currently have a tax exemption status on file, please read this section. ScreenPrinting.com’s tax exemption status process has been updated. What does that mean for you? All screen printers who currently have tax exemption status on file will have to reapply for tax exemption status. Don’t worry, it’s easy. Jump to the section titled, “How to Reapply for Tax Exemption Status,” to learn more about the process.

an image of a person sitting at a computer with a calculator on the desk

Photo by Charles Deluvio on Unsplash.

WHAT IS TAX EXEMPTION?

If you haven’t heard of tax exemption status or can’t remember what it means, here’s a little refresher. According to Chron, “A sales tax exemption releases a business or organization from having to pay state or local sales tax on at least some of the items that it purchases.”

Please note that sales tax exemption is not federal tax exemption. Federal tax exemption only applies to not-for-profit organizations. Your business is most likely eligible for sales tax exemption.

What does this mean for screen printing businesses? Basically, as long as you have tax exemption status, the equipment, supplies, and other items you buy to keep your business going won’t be taxed. You’ll need to be registered as an LLC or Corporation to qualify for tax exemption status (more on this later).

There are two kinds of sales tax exemption status: reselling and manufacturing. Reseller exemption applies to all consumables that would be printed on a shirt. If you plan to resell that garment, anything that you add to it—ink, foil, heat transfers, etc.—falls under this category. The manufacturer's exemption applies to any equipment you’d purchase for your shop. If you buy a press, washout booth, exposure unit, or other large equipment.

But which do you need? How do you know if you qualify? Let’s take a look at some specifics.

RELATED: LOOKING FOR A TAX BREAK? SECTION 179 MAY BE THE ANSWER

WHO IS TAX EXEMPT

Tax exemption may seem frightening. After all, there is a lot of legal jargon in tax information. Let’s make this simple. As long as you have an LLC (Limited Liability Company), you can apply for sales tax exemption status (applying for an LLC status varies per state; please consult your local government to learn more).

HOW DO I APPLY?

Each state is a little different in applying for tax exemption status. Depending on the state you live in, you may have to apply separately for reseller’s and manufacturer’s exemption. If you live in Colorado, for example, you’ll need to fill out separate forms, while if you live in Arizona, you’ll only need to fill out one form for both exemption types. California, on the other hand, has a partial manufacturer’s exemption. Get to know your state’s regulations.

To apply for tax exemption status, you’ll need to fill out the proper forms from the state department where your business resides. Once the paperwork has been approved, head here to register your tax exemption status with ScreenPrinting.com. Approving your tax exemption status through ScreenPrinting.com will only take up to 24 hours (excluding weekends).

Depending on the state you live in, you may have to reapply every year to keep your exemption status. States like Pennsylvania and Florida require businesses to apply every five years. In states like Texas, however, you only have to apply once. Check with your state guidelines to make sure you’re following protocol.

a desk with a laptop, cup of coffee, and a notepad on it

Photo by Andrew Need on Unsplash.

HOW TO REAPPLY FOR TAX EXEMPTION STATUS

If your shop already has tax exemption status, you’ll still need to reapply (if you haven’t already). ScreenPrinting.com has partnered with Avalara to ensure we are in compliance with individual state collection and exemption requirements. Don’t worry though: it’s easy to apply. Simply go here and create an Exemption Certificate(s). When prompted, select either Industrial Prod/Manufactures if you’re purchasing equipment or Resale if you’re purchasing items intended for resale. If you need a tax exemption status for both types, you will need to submit a separate certificate for each one.

Once your certificates have been submitted, you’ll only need to wait 24 hours for validation (excluding weekends).

NOTE: Reapply as soon as possible. If you do not re-submit your tax exemption status, you will be charged taxes if you make a purchase. ScreenPrinting.com cannot refund taxes after a purchase is made. To avoid paying taxes, please submit the exemption certificate before purchasing supplies and equipment.

NEED OUR ADDRESS FOR THE TAX EXEMPTION FORM?

12303 NE 56th St.

Vancouver, WA 98682

IMPORTANT ACCOUNT INFO TO REMEMBER

USE ONE EMAIL ON YOUR ACCOUNT

In order to process your tax exemption status at checkout, you’ll need to use the same email that you used when you applied for the tax exemption and created your account. Make sure your account is fully activated before making a purchase. When you first create an account with ScreenPrinting.com, you’ll receive an email that reads “Welcome to the new ScreenPrinting.com.” Make sure you’ve followed the steps in that email to fully activate your account.

There is a way to have more than one email active under your account. Say you’re the owner of a screen printing shop. You’ve activated your account and have tax exempt status under that email. If you want another employee in your shop to do the ordering for you, but you don’t want to give out your email information, that employee can use their email under your account if it’s linked to yours.

To do this, contact the customer support team at ScreenPrinting.com. The customer support team can create child accounts under your parent account so your employee can order supplies and equipment under your account.

WHEN IN DOUBT, DON’T CHECK OUT

If you have tax exemption status and are ordering from the correct, fully-activated email address associated with your account, you shouldn’t see taxes on your orders when you check out. If you do, pause before ordering and contact customer support. ScreenPrinting.com does not offer refunds or credit back if you’re supposed to have tax exemption status but check out without it. Your best bet? Let the team know when there’s a problem. It’ll save you money and stress.

a piece of tax documentation with a pen on it and ink surrounding it

Sales tax exemption is a great way to keep costs down while still running your shop. Remember, everyone has to reapply to qualify in our new system. Why not keep some of that hard-earned money? Apply for tax exemption today.