Resale Certificate

Table of Contents

A resale certificate, also known as a “sales tax exemption certificate”, is a document that allows a business to purchase goods or products without paying sales tax. The business intends to resell the goods or products as part of its regular business operations, rather than using them for personal consumption or resale to end consumers.

In the United States, businesses that wish to obtain a resale certificate must typically apply for one through their state’s tax agency. In order to qualify for a resale certificate, the business must have a valid sales tax license and be registered to collect sales tax from its customers.

Resale certificates are typically used by businesses that operate in the wholesale or retail trade, such as retailers, wholesalers, and distributors. They can be used to purchase a wide range of goods and products, including inventory, equipment, and supplies.

By using a resale certificate, businesses can save money on their purchases, as they are not required to pay sales tax on the items they purchase for resale. This can help businesses to be more competitive in the marketplace and improve their profitability.

To apply for a resale certificate, also known as a “sales tax exemption certificate,” you will need to follow the steps outlined by your state’s tax agency. Here are the general steps you can follow:

Determine if you are eligible for a resale certificate. In most states, businesses must have a valid sales tax license and be registered to collect sales tax from their customers in order to qualify for a resale certificate.
Find the appropriate application form. You can usually find the application form on your state’s tax agency website.
Complete the application form. You will typically need to provide information about your business, including your name, address, and sales tax license number.
Submit the completed application form. You can usually submit the form online or by mail.
Wait for approval. Once you have submitted the application form, you will need to wait for approval from the tax agency. This process can take several weeks.
Keep your resale certificate up to date. You will need to renew your resale certificate periodically, typically every few years. You will receive notification from the tax agency when it is time to renew.

It is important to note that the process for obtaining a resale certificate may vary by state. It is always a good idea to check with your state’s tax agency for specific instructions on how to apply for a resale certificate.