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                  Scientific, Laboratory, & Safety Equipment – at DISCOUNT PRICES

Date:       Monday, January 2, 2006

To:          All vendors

Attn:      Accounts Receivable & Legal/Tax Departments

RE:        Sales Tax

To each of our vendors:

Do not add Sales Tax to any invoice for Science Projects.  When purchasing products from any of our vendors for any of our customers, Science Projects is not responsible for the payment of any Sales Tax or Use Tax.  The only state where Science Projects has nexus is Texas, and we have provided each of our vendors with a copy of our Texas Resale Exemption Certificate.  Even for orders that are “drop-shipped” directly to our customers in any other states (including the few “problem” states) by any of our vendors (even vendors with nexus in such states), Science Projects does not have the requisite connections (“nexus”) to the taxing state and is not responsible for the payment, collection, or reporting of any sales or use tax on such orders.  Therefore, Sales Tax should not be added to any invoice from any of our vendors, even for so-called “drop-shipments”.

SCIENCE PROJECTS IS NOT RESPONSIBLE TO PAY (AND THEREFORE WILL DEDUCT) ANY SALES TAX THAT MAY APPEAR ON ANY INVOICE WE RECEIVE FROM ANY OF OUR VENDORS.  PLEASE OMIT SALES TAX FROM ALL INVOICES YOU SEND US.

With regard to Sales and Use taxes, we recognize that there are numerous complexities associated with business activities that may involve multiple tax jurisdictions.  There are also constitutional limitations on the duty to collect and pay such taxes.  A state cannot impose taxes on an out-of-state vendor that lacks the requisite connections to that state (“nexus”).  In order to assist you, we are willing to address any questions or concerns you may have.  That is one reason for this letter.  However, Science Projects is in full compliance with all applicable sales and use taxing jurisdictions.  If you have specific questions or concerns regarding Science Projects’ responsibility to pay any such Sales or Use tax, please have someone who is familiar with the relevant tax issues and applicable tax laws to contact us with your specific questions. 

Thank you.

Best regards, 

 Neil Gillespie

Managing General Partner

Science Projects

(817) 453-5555

(817) 453-5556 FAX

neilgillespie@sciproj.com

P.S. -- With regard to any concerns you may have about possible tax audits, unreimbursed tax expenses, etc., related to some sales to Science Projects (e.g., drop-shipments to “problem” states, etc.), see the link below for additional information. 

IMPORTANT NOTE:  This information is not intended as legal advice but is intended as Science Projects' letter and explanation to our vendors regarding exemption from Sales Tax on our out-of-state purchases.

NOTE:  For additional information, please click on the following link:  SalesTaxExemptionLetter-3pages

 P.O. Box 540, Mansfield, TX 76063 ● Phone (817) 453-5555 ● Fax (817) 453-5556 ● Email: support@sciproj.com