A KS vendor asked us for a direct pay permit and our tax exempt number. This was taxable where we used it (CA), and we calculated and paid the CA state tax directly. Why do we need to provide this info to the vendor? They have no nexus in CA.


The information would be to protect the vendor in the case of an audit by Kansas (not California, if they have no nexus there), though whether it is truly necessary in this case, we have our doubts; however, we are not expert in Kansas sales and use tax law. Kansas is a destination source state, so if they delivered goods to you in California and have no nexus there, then the vendor would collect neither sales nor use tax from you.

You are correct to pay use tax to California. According to the Board of Equalization:
Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state.

Of course this forum doesn’t allow the kind of full, detailed information exchange necessary for us provide certain answers regarding tax, and the Expert is not a tax attorney in any event! (And each state has its own laws regarding sales and use tax.) Please understand that the nature of our responses are limited by these constraints as well as the site’s Terms of Use.

If you are in doubt, you should contact the states’ departments of revenue sales and use tax divisions for clarification.

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