There may be times when the auditor and the taxpayer realize that a non-taxed transaction was simply an error. The following examples provide some guidelines. To use these examples, the first analysis should be to determine if sales or use tax applies to the transaction. If the seller doesn t have nexus, then the buyer is responsible. A claim of exemption can be something as simple as the buyer deducting sales tax from the invoice at the time of payment.
Some buyers mark the tax status of a transaction on a purchase order.
A signed purchase order stating that a purchase will be exempt from tax can protect a seller for that transaction only , even though an exemption certificate was not issued. However, a purchase order requesting that tax be charged will bind a seller, despite the fact that the seller has a blanket exemption certificate from this same buyer. A blanket exemption certificate is defined as an exemption certificate with no restrictions or qualifying notations - in other words, an exemption certificate that purports to cover all purchases. When Exemption Certificates Are n t Required Section 144.210 states that a seller must have a signed exemption certificate to prove an exempt sale. But it also states that a taxpayer can prove that a sale is exempt from tax in accordance with proof admissible under applicable rules of evidence before any administrative tribunal of the state.