Common Exemptions

In every state that imposes a sales tax, the general rule is that each retail sale of tangible personal property is presumed to be taxable. In other words, if you happen to make retails sales, you generally must collect or pay sales tax with respect to each sale unless you can show that the sale was somehow exempt from tax,

Types of exemptions. Each state offers its own unique set of exemptions from its sales tax. In general, exemptions are provided on the basis of the type of property being sold, the identity of the purchaser, or the use to which the property will be put.

However, every state allows two distinct exemptions that do not fit neatly within these categories:

Except with respect to property-based exemptions, entitlement to which will be established by the property itself, a purchaser bears the responsibility for affirmatively showing that a particular purchase is exempt from tax. Or, looking at the transaction from the other side of the counter, a seller cannot refrain from collecting or paying tax on a sale unless the seller believes in good faith that the sale is exempt. Meeting the requisite level of proof is generally a matter of the purchaser providing the seller with one of the following: