This guide answers the most frequently asked questions about the Resale Certificate. Know everything about the Resale certificate in this guide.
most frequently asked questions about the Resale Certificate in 2022
- 1 What is a Resale Certificate?
- 2 Some Most Frequently Asked Questions About the Resale Certificate
- 2.1 Who can use a resale certificate?
- 2.2 Where can I use a resale certificate?
- 2.3 How long does it take to get a resale certificate?
- 2.4 What is the difference between a Resale certificate and a sales tax permit?
- 2.5 Is a resale certificate the same as a tax ID?
- 2.6 Do I need a resale certificate to sell on Amazon?
- 2.7 What is a multi-jurisdictional resale certificate?
- 2.8 Do you have to pay taxes on resale items?
- 2.9 What Information Resale Certificate Required?
- 2.10 What states do not accept out-of-state resale certificates?
- 3 How to Get a Resale Certificate
- 4 Conclusion
What is a Resale Certificate?
A resale certificate, also known as a reseller’s permit, is an official document that allows you to purchase items for resale. The certificate acts as a tax deduction and lowers the sales tax on your purchase items.
If you are purchasing items to resell and have a resale certificate with you at the time of purchase, then state law generally requires retail merchants to sell them to you at the wholesale price.
Some Most Frequently Asked Questions About the Resale Certificate
Here are answers to some of the most frequently asked questions about the Resale Certificate:
Who can use a resale certificate?
Retailers usually can use resale certificates to buy products they plan to resell, as well as components of products they plan on selling separately and then assembling or reselling themselves.
Where can I use a resale certificate?
A business registered with the state for sales and uses tax purposes cannot only use a resale certificate when buying products that they plan on reselling.
Most states have laws against this. In Ohio, guidelines are apparent when it comes to using resale certificates: “The term “retailer” shall mean…any person making sales at retail.”
How long does it take to get a resale certificate?
The time to take process your application varies from state to state. The Department typically takes about ten business days to process the typical application, but sometimes it may take up to 60 days.
What is the difference between a Resale certificate and a sales tax permit?
A resale certificate is generally the same as your sales tax permit, sometimes called a sales tax license. It is also often called a resale certificate.
Is a resale certificate the same as a tax ID?
A resale certificate and a tax ID are not the same. A resale certificate allows you to avoid sales tax on the products you intend to resell while the federal government’s tax ID numbers are issued.
Learn More: Do I Need a Tax ID to Sell Online
Do I need a resale certificate to sell on Amazon?
No, you do not technically need a resale certificate to sell products on Amazon. This is because most products sold on Amazon are not federally regulated.
What is a multi-jurisdictional resale certificate?
A multi-jurisdictional resale certificate can help those purchasing goods for resale in more than one state avoid having to use multiple resale certificates on their own.
A multi-jurisdictional resale certificate help business doesn’t have to go through the hassle of filling out different certificates for all of the suppliers they deal with and get approval from each regulator.
Do you have to pay taxes on resale items?
The retailers have to pay sales tax on the products they buy from a wholesaler, but if retailers have resale certificates, it allows you to avoid the sales tax on the products they intend to resell.
What Information Resale Certificate Required?
Following information resale certificate required are:
- Your seller’s sales tax permit number.
- Describe your business activities.
- Your Full Name.
- Describe the product you are purchasing to resell. Be sure to describe the product thoroughly, both inside and out.
- Name, signature title, address, and phone number of the purchaser
What states do not accept out-of-state resale certificates?
Ten states do not accept out-of-state resale certificates:
Alabama, California, Florida, Hawaii, Illinois, Louisiana, Maryland, Massachusetts, Washington, and Washington D.C. are the states that do not accept out-of-state resale certificates.
For example, if you have a Florida resale certificate but try to buy an item in Alabama, your Alabama wholesaler will not accept your Florida-issued resale certificate.
How to Get a Resale Certificate
The process for applying for a resale certificate is varied from state to state. You can apply for a resale certificate through your state’s tax department.
Remember this to apply for the resale certificate, you must have a physical address in this state. If you run your business in more than one state, you must have a resale certificate in all these states.
In this guide (Frequently asked questions about the Resale Certificate), I have tried to answer every question about the Resale Certificate.
I hope that this guide helps you and your business achieve success. I aimed to make it as comprehensive as possible, but I’m sure more points can be included. If you have any questions, you can reach out to me at any time. I’ll be sure to help you out. I hope this guide is helpful.