What is the difference between a resale certificate and an exemption certificate

The exemptions cover a wide variety of topics as well: Texas includes exemptions on things from animals purchased from nonprofit animal shelters to sales with Indian tribes. Mike Bell has been writing professionally since He wrote for and edited the "Independent Florida Alligator," and has also contributed to the "St. By Mike Bell. What Is Tax-Exempt Interest? When Is Sales Tax Incurred?

Resale Certificate Requirements A resale certificate requires many different details to be considered valid. Resale Certificate Notes Purchasers of goods intended for resale must actually give a resale certificate. This means that the resale certificate applies to all items purchased from the vendor. States that allow for resale exemptions either accept a state-issued resale certificate or, in some cases, a multi-state certificate. To find the resale certificate for a specific state, you can visit the Department of Revenue website for that state.

Still others will allow a statement of resale on the purchase order. A business which is registered for sales and use tax can use a resale certificate only when the merchandise being purchased is to be resold by the business. A business cannot use a resale certificate to purchase merchandise that they will use and consume in the conduct of business.

Any merchandise obtained upon resale certificate is subject to use tax if it is used or consumed by the purchaser in any manner, and must be reported and the tax paid thereon direct to the appropriate jurisdiction. Most states require certain elements in order for the resale certificate to be valid.

These elements are:. Save my name, email, and website in this browser for the next time I comment. But sales tax can throw a monkey wrench in those works. What is a Resale Certificate? The type of business you operate. What types of items you are buying tax-free. A signature verifying that you are making the purchase in good faith and truly intend to resell the items you are purchasing. Washington D. How to Accept a Resale Certificate from a Buyer As an online seller, sooner or later you will potentially run into another reseller or purchaser who would like to buy from you.

Ensure the resale certificate is filled out accurately and completely — In the event of an audit, auditors will scrutinize resale certificates. Be sure each resale certificate you accept is completely filled out, including the signature.

Verify that the resale certificate is legitimate — Most states allow vendors to verify a resale certificate online. This allows you to double check that your customer provided you with a valid resale certificate number and that the certificate is not expired.

As a seller, you may also accept resale certificates from others who wish to purchase items for resale. The certificate may be in any form, but a blank resale certificate is available online. The certificate may be in any form so long as it contains:.