Do you pay sales tax when you buy from Home Depot or Lowes?

[Padma Mody]

Currently, I am rehabbing single family house and my contractor told me that, since I am using business credit card, I don't have to pay sales tax. Is anybody doing this? Do you pay sales tax when you buy things for your rehabbing house?

[Wayne Brooks]

Tour contractor is a dummy.  The only time a biz generally doesn't pay sales tax is when the material being bought is being resold (think retailer buying from a wholesaler) AND sales tax is being collected on the resale to the end user. You have to have a resale certificate from the state.  Your buddy's example is sales tax fraud, and the penalties are quite stiff.