Resale Certificate

Illustration of Resale Certificate

This prevents taxation of goods twice because you will collect the sales tax on your customers and submit such tax to your state.

What Is a Resale Certificate?

Each vendor that you purchase goods with will require you to possess a resale certificate issued by your state, which you will then provide to that vendor to, again, evade paying sales tax on goods you purchase depending on the laws of your state (but one may need to pay some use tax).

Your duty is to exude sales tax on your clients who purchase those products and remit the same tax to your state. Resale certificates are also applicable to parts purchased by you in order to manufacture goods that will be sold by your business.

Remember you have to have a different resale certificate per vendor. In other states, your sales tax license, a seller permit will act as your resale certificate to all vendors.

In the event that your business offers taxable services, you will be required to have a sales tax license but not a resale certificate as the latter are only used when the goods purchased are sold to resell or to manufacture goods.

In case you buy products with your resale license and do not sell them, you will bear sales taxes alone, and may be fined and sanctioned too. It is also tax fraud using a resale certificate to purchase goods for which you have no intention of reselling, punishable by state-specific penalties which are a federal offense in the United States.

Resale certificates do not have to be accepted by the suppliers and vendors. There is however, the possibility of them not doing that since the supplier/vendor will be liable to pay the sales tax in case your certificate is not valid.

Multi-Jurisdictional Resale Certificate

Should you buy more than one state, then you can possibly acquire a multi-jurisdictional resale certificate to encompass several suppliers, but this is not applicable to all states. Moreover, they can be tricky in nature and hence you are only going to do some research before obtaining one of these certificates.

You can read more of what the Multistate Tax Commission can say.

State by State Resale Certificate Instructions

You will get a resale certificate at the tax department of your state. This should be at the state in which you conduct business though you might have registered your business in a different state. You will require resale certificates with the vendors in all the states where you will be conducting business.

Alabama

At Alabama, your resale certificate is your sales tax permit. In order to be provided with the sales tax permit, you are required to go to the Alabama department of revenue site whereby you are required to register a tax account. To start up you will need your federal EIN. Registration can take up to a half hour, during which you are required to fill in a lot of information concerning the products you sell. It is free and you should be given your permit in ten days.

Alabama Sales tax does not last forever; its expiration is one year therefore you have to remember the time it expires to renew it on time.

Alaska

Alaska does not levy a state sales tax, but lots of local jurisdictions levy sales tax. In order to get a resale certificate, approach your local government. The charges and duration of time to get the certificate may vary depending on the jurisdiction. Every local jurisdiction has its requirements of resale certificate renewal, hence, consult your local government. As a rule, the resale certificates should be renewed within a year.

Arizona

To access a resale certificate in Arizona, visit Arizona department of revenue. You will download the form and complete one form to every vendor. In Arizona, the certificate can be obtained freely and on-the-spot.

You need to select certain dates in which the certificate will be valid. It would be advisable not to take a period of more than 12 months. Nevertheless, a certificate is deemed to be taken in good faith of not more than 48 months provided the vendor has records that the TPT license is in force in every calendar year the certificate covers.

Arkansas

Arkansas In Arkansas a resale certificate is known as exemption certificate. In Arkansas you will be required to access the Department of Finance and Administration web site where you would get a copy of the exemption certificate form to be filled in and sent to the same web site. The exemption certificate is not complex to complete. The certificate in Arkansas is free and one can use it on filling out once the certificate is filled.

Exemption certificates in Arkansas are not renewable in 12 months. Otherwise, they do not go out of date, but every few years, it is always good to revise them.

California

In California, a resale certificate has to be obtained by going to the Department of California Tax Service Center and downloading the form. You may prepare your resale certificate with the information requiring or get a blank certificate. The certificate is free in California, and it can be used as soon as filled out. The resale certificate in California has no time limits but may be revoked by the buyer by a written request.

Colorado

In order to receive resale or sales tax exemption certificate in Colorado, one will have to go to the Department of Revenue site to download the form. The certificate is multi jurisdictional; hence you will be putting all the states you make sales. Forming the certificate is free in Colorado; in Colorado, once filled in, you are able to start using it.

The majority of resale certificates in Colorado require renewal after every two years and resale certificates are invalid without an active sales tax permit.

Connecticut

In the state of Connecticut, a resale certificate is acquired by going to the site and downloading the form on the Department of Revenue. In Connecticut, the certificate is free but you can use the form immediately you have filled it.

In Connecticut, resale certificates expire in three years, therefore, remember to keep track of the expiration dates in order to renew your certificates in time.

Delaware

There is no state or local sales tax in Delaware, but when selling goods in other states, then you might require to acquire resale certificates in those states.

Florida

You are automatically issued with a resale certificate in Florida when you receive your sales tax permit. It will be blank and all you will do is to fill out a copy of each vendor. You will also get your sales tax permit with the department of revenue.

On the annual renewal of your sales tax permit there is an expiration of Florida resale certificates. The automatic issuance of a new resale certificate will happen as the sales tax permit is renewed.

Georgia

In Georgia, in order to receive a certificate of exemption, one can visit the Department of Revenue site and download the form there. The form is simple to fill out. The certificate is obtained free, and you can use it immediately you fill it. Georgia exemption certificates are not expired but it is better to revise them after some few years so that the information is current.

Hawaii

In Hawaii, the resale certificate can be obtained by going to the site of the Department of Taxation and downloading the form. Getting the certificate is free; you can utilize it immediately it is filled. Hawaii resale certificates never expire and they can only be revoked with written instructions by the purchaser of the goods.

Idaho

In Idaho, application of a resale certificate can be made by visiting the site of State Tax Commission to download the form. You will just complete the form of all your vendors. The certificate is free to obtain and you may start using it immediately it is filled in. In Idaho resale certificates are not time-limited.

Illinois

In Illinois, a resale certificate is obtained by accessing the Department of Revenue site where one downloads the form to be filled. The certificate is free to get, and you can proceed with the use of the form immediately upon its completion. The Illinois resale certificates are not limited to expiration, however, it is advisable that you review the certificates after every three years to ensure that the information is up-to-date.

Indiana

In the state of Indiana to receive a resale or sales tax exemption certificate, go to the Department of Revenue web site and download the form. You will fill a form on each of your vendors. The certificate is free to get; you can utilize it right after it is filled. The resale certificates do not expire unless it stated on the form that the certificate is used once.

Iowa

In order to receive a resale or a sales tax exemption certificate in Iowa, go to the Department of Revenue web site and have the form downloaded. The certificate is free; you can make the use of the form when it is completed.

The certificates of exemption of Iowa sales tax expire in three years. You should download another blank certificate before the expiry date and fill all the existing information in it.

Kansas

After registering, you can receive a resale certificate otherwise referred to as resale exemption certificate in Kansas by accessing the Department of Revenue webpage and downloading the form. The certificate is free to obtain and can be started using it right after it is filled out.

The Kansas resale exemption certificates have the obligation of being renewed in case over one year elapses between dealings with the seller. Note down the date of your purchases so that you are aware of the time you should renew your certificates.

Kentucky

In order to acquire a resale certificate in Kentucky, one should visit the Department of Revenue site and download the form. You do not have to pay to get the certificate; you can apply it immediately it is filled. Kentucky resale certificates have no expiration date, however, the state suggests that they be reviewed after every four years to ensure that all the information contained therein is up to date.

Louisiana

The state of Louisiana has its business services site where one can acquire a resale certificate. The state of Louisiana is among the few in which you must submit your resale certificates to the state, and hence, you will have to go through the application procedure of every vendor. In order to complete the application, you will have to enter your account details on the site. The certificate is also free, and it is supposed to be submitted and prepared to be printed in a period of two to three days.

You will be notified of the date of the expiration of your resale certificate when it has been filed but as long as taxes in your business are current, required reports and filings are current, your certificates will be automatically renewed.

Maine

Maine has a slight difference with the other states in the sense that you are required to project a yearly amount of 3,000 or more in order to be eligible to get a resale certificate. When you apply to your sales tax license, you will complete the anticipated income and in case it exceeds the amount of 3,000, you will automatically receive a resale certificate. You will apply to the Department of Revenue Services to be licensed under sales tax. There is no cost to obtaining the certificate and you will receive it on the spot in case you are eligible.

Resale Certificates are renewed upon a recap done by Maine Revenue Services prior to the certificate being expired. When the active retailers report an amount of $3,000 or over in gross sales in the last 12 months, their Resale Certificate will be automatically renewed. The renewed certificates will have four calendar years.

Maryland

There are some alternatives available to get a resale certificate in Maryland. There is no particular form in Maryland; therefore, one can create his/her own. It should include the name and address of the buyer, the Maryland sales and use tax registration number as well as a signed declaration that the tangible property acquisition or taxable service purchase is intended to be resold. Alternatively, you may utilize a tool that is provided in the Maryland Comptroller site to create a resale certificate. Each of the options is free and you can use the certificates immediately they are filled. Resale certificates in Maryland are not time-bound, though the state suggests that one should review the certificates after every three years to make sure that all the details are recent.

Massachusetts

Resale certificate in Massachusetts can be acquired by filling the form at the department of revenue site. The certificate is free and can be used immediately after it is filled. The expiry of the Massachusetts resale certificates is not applicable.

Michigan

In Michigan, resale certificate is called certificate of sales and use tax exemption and can be downloaded at the site of the Department of the Treasury. The certificate is free and can be used immediately it is completed.

An expiration date (up to four years) can be selected on a form with a blanket certificate. When the transactions between the sales may take more than 12 months, a blanket certificate that expires should be applied. In the case that you selected a blanket certificate of a recurring business relationship, you are not required to renew this blanket exemption provided that the recurring business relationship still exists.

Minnesota

In Minnesota, the form that must be downloaded at the Department of Revenue webpage is to acquire a resale certificate, also referred to as a certificate of exemption. The certificate is free to obtain; it can be utilized when it is completed. The Minnesota exemption certificates are not time-limited, except in cases where the information has changed hence it is recommended that they are reviewed and updated after a certain period of time.

Mississippi

Your resale certificate will be your sales tax permit. In order to receive your sales tax permit in the state of Mississippi, you will be required to open a tax account on the Department of Revenue site. Registration is free. The sales tax permits do not expire in Mississippi and therefore you can keep using a copy of the permit as your resale certificate as long as you remain in business.

Missouri

In Missouri, in order to receive a resale certificate or exemption certificate, one should visit the Department of Revenue and download the form. Select sales and download the form by using a tax exemption certificate. The certificate is free and can be used immediately it is filled.

The Missouri exemption certificates lapse in five years. All to renew, you will just download the form and do it once more to submit to your vendor.

Montana

In order to get a resale certificate in Montana, go to the Department of Revenue website and get the form. The certificate is not charged and you can fill in the form immediately it is filled. The Montana resale certificates have no expiration date. Just in case, it is good to revisit them after every few years so that all information can be recent.

Nebraska

The resale certificate (called certificate of exemption in Nebraska) is received by visiting the Department of Revenue site where the form is downloaded. Choose the certificate of exemption, download the form, and fill all the information there. The certificate is free and you could use it immediately after it is filled in. The exemption certificates in Nebraska never have an expiration date provided that in every 12 months one of the transactions is made.

Nevada

In order to receive a resale certificate in Nevada, go to the Department of taxation website where the form is to be downloaded. The certificate is obtained at no cost; it can be used immediately it is filled.

The Nevada resale certificates expire after every five years. To renew, you just have to download the form once more, fill it, and offer it to your vendor.

New Hampshire

There is neither state nor local sales tax in New Hampshire, however, when you are selling commodities in other states, you might be required to collect resale certificates in other states.

New Jersey

In order to acquire a resale certificate in the state of New Jersey, you should visit the Division of Taxation site and download the form. There is no cost of getting the certificate; you can utilize it immediately the form is completed. The New Jersey resale certificates do not expire unless the information is altered. It is thus worth considering it every now and then to update the information.

New Mexico

In order to acquire a resale or non-taxable purchase certificate in New Mexico, go to the department of taxation and revenues website and download the form. Go to the form ACD-31050 and download the form by clicking the file. The application will have to be mailed to the following address: New Mexico Taxation and Revenue Department, PO Box 5557, Santa Fe, New Mexico 87502-5557. The certificate is complimentary, and you ought to get it in seven days. The non-taxable transaction certificates of New Mexico are not expired. That is why it is a good idea to revise them after every several years in order to make sure that the information is recent.

The New Mexico punishment of tax fraud is a payment of tax due and interest and penalty and perhaps, a fine of $10000 and nine years in jail.

New York

In New York, the form must be downloaded at the Department of taxation site to receive a resale certificate. The certificate will be free, and you can use the form once it has been filled out. New York Resale certificates do not expire. To keep the information current it is a good idea to go through them after every few years.

North Carolina

In North Carolina, a resale certificate is referred to as exemption certificate, and to get it, visit Department of Revenue web to download the form. Choose exemption certificate forms and download Streamlined Sales and Use Tax Certificate of Exemption form. The certificate is obtained free of charge; one can start using it once it has been filled out. North Carolina exemption certificates are not expired provided that one transaction is consummated in 12 months.

North Dakota

In order to receive a resale certificate in North Dakota, one needs to visit the Department of Taxation. You are going to scroll down to sales and use tax forms and then select certificate of resale. The form can be completed online and printed. Getting the certificate is also free, you can be using it immediately it is filled. The state of North Dakota has no expiration of resale certificates. One should revisit them after every few years to keep in place all the information.

Ohio

Visit the Department of Taxation site to secure a resale certificate which is referred to as exemption certificate in Ohio. You can download a unit exemption certificate in case you are only making a single purchase with a vendor or a blank exemption certificate in case you are going to undertake recurrent purchases with a vendor. All you do is to download the form that you require and complete it. The certificate is free and may be used immediately after being completed. The exemption certificates in Ohio do not have an expiration date. It would be recommendable, though, to read them after every few years so that the information can remain up to date.

Oklahoma

To receive a resale certificate that is referred to as certificate of exemption in Oklahoma, visit the Tax Commission site and download the streamline certificate of exemption. The certificate is free and is usable immediately after being filled. The exemption certificates used in Oklahoma are not time limited. It is prudent that they be reviewed after a few years just to make sure that the information is not outdated.

Oregon

In order to secure a resale certificate in Oregon, go to the Department of Revenue site to download the form. Getting the certificate is at no cost; it may be used immediately it is filled. The Oregon resale certificates are not subject to expiry unless there is a change in information. It is therefore advisable to review them after every few years so that the information provided is up to date.

Pennsylvania

To receive a resale certificate, which in Pennsylvania is referred to as exemption certificate, you have to be at the Department of Revenue site where you can download the form. The certificate is also free to obtain; it could be used immediately after being filled out. The exemption certificates in Pennsylvania are not expired. And it is not a bad idea to revise them after every few years in order to make sure that the information is current.

Rhode Island

In Rhode Island, resale certificate is only available by accessing the Division of Taxation on the internet and downloading the form. The certificate is free to obtain; and it can be put into service immediately after being filled.

The Rhode Island resale certificates have a duration of four years. In order to renew them, you need to fill another form and submit it to your vendor.

South Carolina

In South Carolina, a resale certificate can be received by visiting the Department of Revenue site and downloading the form. The certificate is free and can be used immediately after it is filled. South Carolina resale certificates are not time-limited provided that the business continues to exist. It is also recommendable though to review them after every several years so as to ascertain the information is up-to-date.

South Dakota

In order to receive a resale certificate also called exemption certificate in the state of South Dakota, go to the Department of Revenue website and download the form. In the list of options, choose exemption certificate and navigate to fill the form. It will just be a matter of printing the form. The certificate is free to obtain; it can be used once filled in. The exemption certificates of South Dakota are only good to the extent that the information is changed. It is thus a good idea to revise them after every few years to make sure the information is updated.

Tennessee

The sales and use tax section of the Department of Revenue site will enable one to obtain a resale certificate, which is referred to as a Government Certificate of Exemption in Tennessee. Select the sales and use tax certificate of exemption and streamline and download the form. The certificate is free to get; it can be utilized at the time it has been filled in. The Tennessee resale certificates do not lapse provided that at least one purchase is made in every 12 months. To make sure that the information is up to date, you should go through them after every few years.

Texas

In Texas, a resale certificate is issued by the Comptroller through his website where the form is downloaded. Select Resale and exemption certificates. There is also a certificate in Spanish. The certificate is given without any fee; you need to use it after filling it out. The expiration of Texan resale certificates is in case of change of information of the buyer. It is also a good idea to check them after several years of time to make sure that the information is in the present state.

Utah

To receive a resale certificate which is called exemption certificate in Utah visit the site of Tax Commission and download the form. The certificate is free to get and can be used immediately after it is filled in. The Utah exemption certificates have no expiry provided one makes a purchase with the vendor within a time span of 12 months. Thus, you are supposed to track the date of purchases to retain your existing certificates.

Vermont

Go to the department of taxes website and acquire a resale certificate which is called exemption certificate in Vermont. You will choose the option of streamlined exemption certificate to get the form. The certificate is free to get; the form can be used as soon as it is completed. Vermont exemption certificates are not an expired commodity but the user is required to maintain all the information in storage system over three years. That is recommendable, but it is best to revisit them after every few years so that the information is current.

Virginia

In Virginia, a certificate of exemption is called a resale certificate, so that to get one, go to the Department of Taxation site. After that, choose form ST-10 to download the form. The certificate is free and can be obtained immediately after filling the form. Exemption certificates of the Virginian state do not run out. One can have a good idea to revise them after every few years to keep the information current.

Washington

In order to get a resale certificate which is also referred to as exemption certificate in Washington, visit the Department of Revenue site and download the form. The certificate is free, and you can utilize the form as soon as it is completed.

Washington exemption certificates usually have a life span of four years. The certificate is valid on condition of not exceeding two years in case any of the following applies: the business is less than 12 months old, you have not reported any income within the last 12 months, the business has not been active on the time of receiving the certificate, you have not filed any tax returns in the last 12 months, or you are a contractor.

West Virginia

Go to the tax division site where you can get a resale certificate in West Virginia. To download the form, under the documents, choose F0003 Streamlined Sales and Use Tax Agreement, certificate of exemption. The certificate costs only $30 and you may use the form immediately you get it filled. The certificate would only become invalid in case you do not buy anything with the vendor within 12 months unless you indicated this on the form that the certificate was issued to use in a single purchase. Record the dates of your purchases so as to have updated certificates.

Wisconsin

In order to receive a resale certificate which is referred to as exemption certificate in the state of Wisconsin one has to visit the Department of Revenue site in order to download the form. The certificate comes at a certain price of $20 and the form is operable once it is completed. The Wisconsin resale certificates are not time-expired. It is prudent to consult them after every few years so as to make sure that the information is current.

Wyoming

The Wyoming Department of Revenue Excise Tax Division can generate a resale certificate when a person chooses the option of Exemption Certificate. There is no cost of acquiring the certificate; you can submit the form immediately it is completed. Wyoming resale certificates are not expired. Reviewing of the certificates after a few years is a good idea to update the information.

Disclaimer: It depends on a state. To see the exact forms and fee and renewal requirements, as well as detailed information of all 50 states, go to your individual Department of Revenue site or meet with a tax professional.

Frequently Asked Questions

In most states, yes. You typically need to provide a resale certificate to each vendor you purchase from. However, some states allow "blanket" certificates that cover all purchases from a vendor for a specified period, while others may accept your sales tax permit as your resale certificate.

Misusing a resale certificate is considered tax fraud, a federal offense. If you purchase items with a resale certificate that you don't intend to resell (such as office equipment for personal use), you could face significant fines, back taxes, penalties, and in severe cases, criminal charges including jail time.

Generally, no. You need a resale certificate from each state where you do business. However, some states participate in the Streamlined Sales Tax Agreement and may accept multi-jurisdictional certificates. Check with each state's tax department to confirm their requirements.

It depends on the state. Some states' resale certificates never expire, while others require renewal annually or every few years. Some states require renewal only if more than 12 months pass between transactions with a vendor. Always check your specific state's requirements.

No, vendors are not legally required to accept resale certificates. They may decline if they have concerns about the certificate's validity, as they could be held responsible for the sales tax if your certificate is fraudulent or invalid. However, most reputable vendors will accept valid resale certificates.

A sales tax permit (also called a seller's permit) allows you to collect sales tax from customers. A resale certificate allows you to purchase goods for resale without paying sales tax at the time of purchase. In some states, your sales tax permit also serves as your resale certificate.

No, resale certificates only apply to tangible goods purchased for resale or manufacturing. If your business only provides services, you won't need a resale certificate. However, you may still need a sales tax permit if your services are taxable in your state.

Typical information required includes your business name, address, sales tax permit number, the vendor's name, a description of the items being purchased, your signature, and the date. Some states have specific forms, while others allow you to create your own certificate with the required information.

What a Resale Certificate and How to Obtain one