Sales Tax Exemptions
Some sales are exempt from tax. These sales usually fall into one of the following categories:
- The buyer is exempt
- The buyer's industry is exempt
- The goods will be put to an exempt use
- The goods will be resold
If you qualify for an exemption, you must give the seller an exemption certificate to document that fact. The ST-101 form is the most commonly used exemption certificate; however, there are others for specific sales tax exemptions (see Forms/publications, below).
If the exemption is documented on an ST-101 form, you don't have to give the buyer a new certificate every time you make a purchase. Your ST-101 form remains valid even when the sales tax rate changes, as long as the information on the certificate is accurate.
- Form ST-101 Sales Tax Resale or Exemption Certificate
- See a full list of sales tax forms, certificates, and brochures for specific industries that discuss related exemptions
Foreign diplomats and consuls visiting and working in the United States qualify for sales tax exemptions based on the terms of treaties with their nations. To claim an exemption, the buyer must have an official tax exemption card.
Two types of cards can be issued — "personal cards" and "mission cards." The wording and color coding of each card indicates which exemptions the mission and its employees and families are entitled to. For example, there is a Mexican Consulate in Boise, Idaho. Both the personal and mission cards issued for Mexico have a yellow stripe because the exemption for Mexico is limited. All purchases of hotel rooms are exempt from sales tax for Mexican consular employees in the U.S. Other purchases must exceed $50 to be exempt.
Vendors should read the front and back of the cards carefully before allowing an exemption, and they should keep photocopies of both sides of the card to document the exempt sale. Other than the copies of the card, no other documents (including Form ST-101) are required. For more information, visit the Office of Foreign Missions Tax program.