You want to know why some tax codes for items like software, hardware, clothing, and school supplies include almost identical descriptions, but one is for business-to-business and one is business-to-customer.
- Business-to-business means sales to business entities
- Business-to-customer means sales to home consumers
- Codes within these categories generally have very similar code numbers and almost identical taxability, separate designations exist because:
- Sales tax holidays usually apply tohome consumers only and typically include back-to-school related items, like software, hardware, clothing, and school supplies
- For software/hardware some states restrict non-taxable status (exemptions) to software sold for business use only.
For more information, see manage product taxability.