But what happens when the reseller happens to pay sales tax on an item purchased for resale (the reseller doesn't have the certificate with them or the like). How is that recovered in MA?
To make it concrete, say the reseller buys something for $1000 and pays the $62.50 sales tax to the vendor. The reseller turns around and sells it for $1200, collecting $75.00 from the customer.
So what happens when the reseller files their sales tax return? I would have thought that a credit could be taken for the sales tax already paid so that only the $12.50 difference would be remitted by the reseller, allowing the reseller to recover the $62.50 they paid. But when I look at the sales tax return form there does not appear to be any line for that.
There is a line (which will be subtracted from gross sales as part of determining taxable sales) that reads "Sales for resale/exempt sales or other adjustments". Can the $1000 sale the reseller paid tax on be put there (as an "other adjustment"), resulting the reseller only owing $12.50.
Or is MA a state where no credit or adjustment can be claimed, the full $75.00 collected must be remitted, and the reseller's only recourse is to go to the vendor with the receipt and resale exemption certificate and ask for a refund of the sales tax that was paid to the vendor?
The MA DOR's webpages and sales tax "guides" are annoyingly deficient on addressing this situation.