August 17, 2021
Are you paying too much for the cost of goods sold or your products that will be resold in your store? Well, if you’re not using a resale certificate when you purchase those products that will be resold. You are in fact paying too much and you don’t need to.
So just as an example, if you run down to the dollar general and you grabbed some dishwashing detergent, sponges, toilet paper, things that you’re going to resell in your camp store. Your end user, who buys that product from you will pay the sales tax. Therefore you don’t need to pay it as well when you purchase the product.
If you do pay, you’re missing out on a percentage of profit that you are not going to get, you’re giving it away to the government. So use a resale certificate whenever you purchase products that will be resold and be careful, you can’t just use this on supplies.
So if you’re running down to the local Walmart to buy some supplies that you need for your cabins or your repairs, or to fix something, you can’t use a resale certificate for that. So this may result in you having to ring up two separate orders when you go to Sam’s club, or when you go to the Dollar General.
Make sure you take your resale certificate with you. Some vendors you want to check ahead of time to minimize the hassle on what they need from you, if they need you to fill out some paperwork to have that on file, others you’ll just have to show it. Now on that resale certificate, you will list your sales tax ID number. That is the number that you use for resale to certify that these products are being purchased for resale.
So hope this saves you some money and increases your bottom line. I’m Donna Bordeaux from CampgroundAccounting.com. Please follow us on Facebook and Instagram. Make sure you check out our blog and our website from the link below, subscribe to our YouTube channel, and hit the bell to be notified when we post. To contact me, email me at email@example.com
Donna Bordeaux, CPA with Campground Accounting
What happens when you send two CPAs out into the relaxing outdoors to camp? You get CampgroundAccounting.com. Donna and Chad have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They camp and travel across the country every chance they get, so it’s just a natural fit that they focus their CPA skills on helping campground owners throughout the USA grow their businesses and minimize the impact of taxes. They understand the key performance indicators and specialized issues that face RV park owners every day.