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How to Make Sure Your Business Isn't Paying Too Much in Sales Tax

Consider taking these three steps to avoid overpaying the tax man. Plus, the best and the worst tax states for business owners.

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This story appears in the June 2011 issue of Entrepreneur. Subscribe »

Dean Cycon was having an after-work beer with one of his suppliers and complaining about the high price of propane, which powers Dean's Beans Organic Coffee Company, his fair-trade wholesale and retail coffee company in Orange, Mass. The supplier, seeking a silver lining, said, "Well, at least you don't have to pay sales tax on it, because it's used in your manufacturing," Cycon recalls.

When he returned to his office, Cycon found that he had, in fact, been paying sales tax on propane--along with various other supplies used in creating his products.

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