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Not at all. If you purchase anything at the retail level, it is taxed, no matter who you're purchasing it for.

I don't believe that's what the bill states. It states "No tax shall be imposed under section 101 on any taxable property or service purchased for... a business purpose in a trade or business." It makes no stipulation that the purchase can't be at retail (it does for purchases for export - they must be done at wholesale).

I stand corrected. As long as the item purchased is to be used for business purposes, the item is not taxed. However...

Excerpt from H.R. 25, Sec. 509: Any purchaser who purchased taxable property or services but did not pay tax by reason of asserting an intermediate and export sales exemption shall keep records sufficient to determine whether said exemption was valid for a period of 7 years after the purchase of taxable property or services.

Basically, to purchase, say, a car for your own personal use but claim as an intermediate sales exemption would be tax evasion and illegal. You would have to keep records that 95% of the car's use was in the course of producing taxable goods and services. If the car is used for business, but not 95% of that use is for business, then you would be entitled to a partial refund of your tax through a "Business Use Conversion Credit", which covers both mixed-use items and previously taxed items converted to business use (i.e., a previously purchased home computer used to start up a home business).