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Texas: Properly Fill Out That Exemption Certificate Or Else…


 Just complete Texas exemption and resale certificates honestly.

Most of us learn as young children that it's not okay to lie. We learn this from Aesop's fable, The Boy Who Cried Wolf, in which a young boy pretends to encounter a wolf so many times that when he meets a real wolf and cries for help, no one comes. We learn this from our parents and our teachers and our peers. It can be a painful lesson, but once learned, it sticks.

Unless it doesn't.

The state of Texas wants liars to know that it's a criminal offense to lie on tax forms. An offense that can and will be prosecuted.

States with sales tax, like Texas, allow taxable sales to be purchased tax-free when the transaction is accompanied by a valid sales tax exemption certificate or resale certificate. If that certificate is false and sales tax should have been paid, then a crime has been committed.

The fact that it's a criminal offense to knowingly complete resale and exemption certificates incorrectly is stated on both resale and exemption certificates.

Texas Sales and Use Tax Resale Certificates include the following:

"I understand that it is a criminal offense to give a resale certificate to the seller for taxable items that I know, at the time of purchase, are purchased for use rather than for the purpose of resale, lease or rental, and depending on the amount of tax evaded, the offense may range from a Class C misdemeanor to a felony of the second degree."

The Texas Sales and Use Tax Exemption Certification states:

"I understand that it is a criminal offense to given an exemption certificate to the seller for taxable items that I know, at the time of purchase, will be used in a manner other than that expressed in this certificate, and depending on the amount of tax evaded, the offense may range from a Class C misdemeanor to a felony of the second degree."

The criminal offense and penalties for false exemption and resale certificates is explained in Texas Administrative Code #34.

Sales tax isn't worth a criminal record. Keep your exemption certificates accurate and up-to-date and stay out of jail.

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photo credit: Mark Strozier via photopin cc

 


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.