Wednesday, September 05, 2007

Beware of Bad Advice

A seminar participant in Alabama (I’m lying – it wasn’t Alabama) called the Department of Revenue. She was told, “Your Alabama resale certificate will work in all the states.”

Well, sometimes it does and sometimes it doesn’t. For example, if you’re in Alabama, and go and pick up goods at your vendor’s dock in some other state, they’ll probably accept your Alabama resale certificate. But they will probably also require you to fill out a form making clear that you are buying the goods for resale, and you are taking them out of state without use, AND that you won’t be selling it right back into the state where you’re picking it up.

And, of course, an Alabama certificate will work when the shipment is sent to Alabama.

But it won’t work in states that have, what I call, the Nutty Drop Ship Law.

There are two morals to the story

1. Getting phone advice from the state is always risky;
2. Be VERY careful about accepting the advice of a state when it comes to the rules in other states. Frankly, many of them barely know their OWN state laws and have no business telling you what the rules are in other states.

Sales Tax Guy

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