Exemption Certificate
Definition
Documentation supporting a sale made without sales tax because the buyer or the use qualifies for exemption, for example a non-profit, government body or manufacturing input. Rules and forms are state-specific, and the seller bears the burden of holding a valid certificate.
Related Terms in US Tax
Form 1099
An IRS information return used to report various types of income other than wages. 1099-NEC is for non-employee compensation ($2,000+ to a contractor for payments made in 2026 onward; $600+ for 2025 and earlier). Businesses must file by January 31. HelloBooks tracks contractor payments for 1099 reporting.
Form W-2
An IRS form reporting wages paid to employees and taxes withheld. Employers must provide W-2s to employees by January 31 and file copies with the SSA.
Sales Tax Nexus
The connection between a business and a state that requires the business to collect and remit sales tax. Nexus can be physical (office, warehouse) or economic (exceeding revenue/transaction thresholds). HelloBooks includes a nexus calculator.
Section 179 Deduction
An IRS provision allowing businesses to deduct the full purchase price of qualifying equipment and software in the year of purchase, rather than depreciating over time. HelloBooks includes a Section 179 calculator.
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