Purchases by the salon

When you purchase items for resale, you do not need to pay retail sales tax. You may provide your vendor with your reseller permit for these purchases.

If you pay retail sales tax on items you resell, you may claim a Taxable Amount for Tax Paid at Source deduction on your excise tax return to recover the retail sales tax you paid in error. This deduction is claimed under the retail sales tax classification only. This deduction does not apply to Retailing B&O tax. You must keep copies of all purchase invoices or receipts for the purchases you claim as a deduction.

Examples of items you might purchase for resale include shampoo, conditioner, hair styling products, nail polish, and cosmetics.

However, you are considered the consumer of any supplies you use while providing beauty services. As a consumer, you are required to pay either retail sales tax or use tax on these purchases. Examples include shampoo and conditioner used when washing a client’s hair, gloves, and foil.

You must also pay retail sales tax or use tax on all purchases of business assets and other items that are reusable. Examples of these items include:

• Furniture.
• Computers.
• Hair styling appliances such as hair dryers and clippers.
• Hair styling tools such as combs and scissors.
• Supplies such as pens, paper, toilet paper, and tissues.

If your vendor does not collect retail sales tax, you must report use tax on these purchases on your excise tax return. The amount subject to tax includes the entire charge for the product, including shipping or delivery charges.