Hey Chays - I can try to help!

As a background and basis for the thoughts below - I was a CFO at a Landscape company that had an attached retail Garden Center that also provided all of the plants and bulk materials for our Service and Install divisions.

Also as a note, sales tax codes can vary greatly state-to-state, so you may want to check with a tax pro in your state to ensure compliance.

To start - my answer would vary based on the structure of the business(es):

- If the GC and LS are under the same legal business entity (and accounting is consolidated), the “sale” of and “return” of materials would simply be a transfer of inventory from one division to the other. That sounds easy peasy, but I know that it isn’t - especially if you are running separate retail software for the POS/inventory management and Aspire for front-end LS management/inventory.

 - If the GC and LS are separate legal entities (but with the same owners), the PRs should be processed just like you would for any other vendor, with the vendor credits added in your accounting system (offsetting to Intercompany Expense) to settle the “bills”. 

Short story long - it depends; on your state’s sales tax code, on the entity structure, etc.

But - most commonly the “inventory transfer” in the same-entity scenario above would not be considered a taxable event, and the “purchase/sale” in the separate-entity scenario above could be considered a taxable event, but most states would have Resale exemptions that would turn the exchange into a non-taxable event.

Final Note: None of the above is talking about how the LS charges sales tax to it’s customers - this would be a separate conversation with other factors. If you boil sales tax down to the basics - states are normally after taxation on the end user, and (usually) try to avoid double-taxation (on purchase and sale).

So, if in your state, you normally have to charge sales tax when selling/installing plants to your customers, odds are you (most likely) shouldn’t be paying sales tax when purchasing the plants (through GC or LS), given you are providing vendor(s) with a Resale Certificate.

I hope this helps - let me know if you need any further clarification!