Author: Dona Basu

Pennsylvania Is A Great Place For Business

Pennsylvania is a place where the entrepreneurial spirit is alive and well. This is one of the reasons that the state can boast of several hundred thousand small businesses. Pennsylvania also did well bouncing back from the Great Recession with a fairly low unemployment rate. The state is a leader in many key industries that include aviation, technology, energy, life sciences, and film.

However, there are some challenges. Pennsylvania has one of the highest corporate income tax in the nation. This is one of the reasons that it is important to apply for a tax resale certificate in order to not pay unnecessary sales tax.

What is A Tax Resale Certificate?

It is critical that you understand that tax resale certificates can also be used on items that will be resold. Office supplies, such as new computers for your employees, would not fall under the category of retail.  It would be considered fraud not to pay sales tax on these items.

If this is confusing for you, just think of tax resale certificates as state tax exemption certificates.  Some states actually call them exemption certificates or reseller’s permits.

As a savvy business retailer, it is important that you are aware of how to utilize tax resale certificates to your best advantage. In short, a retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell such as wood for a cabinet. This is a significant saving and can save your business a ton of money if utilized properly. Our article Everything You Need to Know About Tax Resale Certificates will give you an in-depth rundown about how these types of certificates can help your business.

Unfortunately, the rules of Tax Resale Certificates can vary greatly by the state which can be very confusing. Our site makes the process as easy as possible. Just take advantage of these user-friendly options to help take the headache of applying for a tax resale certificate off your plate.

Getting Started In Pennsylvania

In order to obtain a resale certificate in Pennsylvania, one must apply for a Pennsylvania Seller’s permit. This state imposes a sales tax on “the retail sale, consumption, rental or use of tangible personal property” in the state; digital goods are included within this definition. Pennsylvania will also tax business services, particularly those that include building, repairing, and/or maintaining a taxable item.

The following are examples of items exempted from sales tax in Pennsylvania:

• Gum And Candy
• None Ready To Eat Food
• Clothing
• Sales Only For Resale

Pennsylvania Resale Certificate

After you have obtained your Pennsylvania Seller’s Permit then you can apply for a Pennsylvania Exemption Certificate or REV-1220 in order to be not charged sales tax for items that are intended to be resold.

Generally, resale certificates are used:

• When purchasing finished items that are for resale.
• When buying materials which will become a physical part of an item that will be held for resale.
• When purchasing items which will be solely for demonstration or display while holding them for sale in the regular course of business operations.

Purchasers can not use a resale certificate when buying a product they will:

• Use rather than sell
• Use in their business before they sell it
• Use for a personal purpose
• Hold as an investment for appreciation in value and for sale in the future.

If you are an out-of-state seller, you may use your state’s reseller’s permit number to buy items from Pennsylvania retailers tax-free.

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your hands.

We provide a tax resale certificate for the top states that include:

• California
• Texas
• Massachusetts
• New York
• New Jersey
• Illinois
• Florida

Let us handle the hassle so you can go about the important work of leading your retail business to great success. 

Tax Resale Certificates

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

Getting Started In Maryland

Businesses in Maryland that provide any type of taxable goods and services must first apply for a Maryland Sales Tax Permit from the Maryland Comptroller’s Office. This permit is also known as a seller’s permit, sales tax number, or sales tax license.

Is The Tax Resale Certificate The Same As A Seller’s Permit?

Even though a tax resale certificates are called reseller’s permits in some states, it is important not to confuse them with seller’s permits. A seller’s permit allows a retailer to charge tax on items that they are going to sell to a customer. A tax resale certificate allows you to buy items that are intended for resale without paying a sales tax on those items.

When Do You Need A Seller’s Permit In Maryland?

A business must register for a seller’s permit in Maryland when:

• If your business has “nexus” (significant presence in the state) such as a retail store, office, or warehouse where products are produced, stored, and/or delivered
• Craft show and fair items sold in Maryland
• You have employees (including sales representatives or agents) that are working in Maryland
• You have an online business located in Maryland that is selling taxable products to Maryland residents
• You are an out-of-state business selling to Maryland residents and one of the following:
  • Total sales of tangible personal property to Maryland residents is $100,000 or more; or
  • Physical Products

Physical Products

Almost all physical products are taxable when sold at retail in Maryland.  

These include:

• General merchandise like furniture, appliances, and clothing
• Titled or registered items like vehicles
• Some foods, medicine and medical equipment, security services, and sales of machinery and equipment used in producing goods are tax-exempt.

Often digital products are not taxable in this state.

Services

In Maryland, most services are not taxable with the following exceptions:

• Short-term lodging
• Commercial janitorial and other cleaning services

Does A Vendor Have To Accept My Tax Resale Certificate?

It is extremely important to a retailer’s bottom line that they do not pay sales taxes on goods if there is a possibility that the tax can be exempted on a state level. However, it is also crucial to understand that a wholesaler is not required to accept your tax resale certificate in some states. 

If the vendor doesn’t accept the certificate, the buyer will have to pay the sales tax on the merchandise being purchased.  In most cases, they will be able to get a credit for the sales taxes paid later on in their sales tax filing. 

Additionally, purchases under $200 may not be tax-free unless;

• Purchasing the goods by vendor credit,
• Goods that already are exempted from sales tax
• Alcoholic beverages regulated by Article 2B of the Annotated Code of Maryland

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Massachusetts Is A Great Place For New Businesses

Massachusetts is known for its healthy economic growth. This state recovered strongly from the financial crisis of 2008 and is a fantastic place for small businesses. The following reasons contribute a large part to Massachusetts’ success:

• Strong Education Systems
• The Tech Industry
• A Nurturing Community

Education

It is no secret that Massachusetts is home to some of the finest universities in the nation, including Harvard and MIT. However, these are just two of the top names of the many other colleges that also graduate a crop of highly skilled and educated workers. This gives small businesses an incredibly talented diverse pool of employees.

The Tech Industry

Boston has often been called the Silicon Valley of the East. The city is home to a very powerful and robust tech industry. Massachusetts is known to nurture innovation and be welcoming to new ideas in business. This helps create well-paying jobs and translates into more prosperity for the local economies. This has helped the state become one of the top five places for tech in the country.

A Nurturing Community

Massachusetts has created a community where small businesses rarely feel like they are alone. There are support networks all over the state that help small businesses connect with mentors or industry supporters through thriving online communities. Massachusetts also has a lot of state grants and incubator programs that nurture the growth of small businesses.

The communities also go out of their way to stay true to local small businesses instead of supporting some of their larger competitors. The towns take pride in their locally sourced economic opportunities and want to help their neighbors grow on a steady path to great success.

What Is A Tax Resale Certificate?

Massachusetts is a great place for small businesses but does have a fairly high state sales tax. One of the best things a savvy entrepreneur can do is register for a Tax Resale Certificate to save money on unnecessary taxes.

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

Getting Started In Massachusetts

Businesses in Maryland that provide any type of taxable goods and services must first register as a vendor and get a Sales Tax Permit from the Massachusetts Department of Revenue. This permit is also known as a seller’s permit, sales tax number, or sales tax license.

Is The Tax Resale Certificate The Same As A Seller’s Permit?

Even though a tax resale certificates are called reseller’s permits in some states, it is important not to confuse them with seller’s permits. A seller’s permit allows a retailer to charge tax on items that they are going to sell to a customer. A tax resale certificate allows you to buy items that are intended for resale without paying a sales tax on those items.

Does A Vendor Have To Accept My Tax Resale Certificate?

It is extremely important to a retailer’s bottom line that they do not pay sales taxes on goods if there is a possibility that the tax can be exempted on a state level. However, it is also crucial to understand that a wholesaler is not required to accept your tax resale certificate in some states. 

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Remember To Verify Any Tax Resale Certificate Presented To You

A vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Goods you or your employees purchase for private use.
• Goods your business gives away for free of charge or as gifts.
• Goods your business uses to conduct business, like office supplies, equipment, etc.
• Goods your business rents to be used and not for re-leasing.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Texas Is A Fantastic Place For Entrepreneurs

Texas has always been a great place for people with big dreams. Very recently Texas has actually been recognized as the best place to start a business in all the United States. The state has been recognized for creating an amazing business environment for mostly the following reasons:

• Great Talent
• Thriving Metropolitan Areas
• Good Quality Universities
• Tax Benefits
• Innovation
• Friendly Towards Small Businesses

Getting A Tax Resale Certification Is One Of The Best Things You Can Do As An Entrepreneur

If you decide to start a business, a tax resale certificate can really save you money on taxes.

In short, a tax retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell, such as wood for a cabinet.

However, the process can be difficult and the rules are different for each state. That is why TaxResaleCertificate should do all the hard work for you. We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence. Make sure you check out our second blog in this series so you can learn even more valuable information about tax resale certificates.

Texas Has Great Tax Benefits

The Business Tax Climate Index recognizes that Texas is a very appealing location for small businesses. This is because the state does not have an individual income tax or a corporate income tax.

Tax Resale Certificates Are A Great Way To Save Money In Texas

The state allows you to be exempt from sales tax if the taxable item is intended for resale. This means that you need to provide the seller with a resale certificate or pay a sales tax on the item. The certificate serves as a guarantee that you intend to resell the item, so sales tax will not be needed at the time of purchase.

What Information Do I Need For The Resale Certificate Registration Form?

You must provide the following information:

• The name and address of the purchaser
• The name and address of the seller
• The registration number of the purchaser
• An accurate description of property purchased for resale
• The reason for the exemption
• A statement that if the property is put to use in a taxable manner that the purchaser will remit the consumer use tax
• Date and Signature and Title of the authorized individual at the purchaser

Make Sure You Understand Your Responsibilities

You can only use the resale certificate in Texas if the goods you are purchasing are going to be resold. If there is any uncertainty about whether or not you are going to resell the items, then you should definitely not use the resale certificate for the tax exemption. This will make your business liable for the unpaid taxes on the original sale. The use of a resale certificate in this manner to evade taxes is illegal and can result in criminal charges ranging from misdemeanor to felony, based on the amount of taxes evaded.

How Do You Submit A Resale Certificate In Texas

A seller can not legally sell you any goods tax-free in Texas if you do not present them with a properly filled out resale certificate. The original, filled-out certificate should be furnished to the seller immediately when the purchase is being made. It is not required for you to send a copy of the form to the Comptroller’s office. However, if all of your purchases are for resale, your vendors are allowed to accept a blanket resale certificate, which will cover that all items purchased going forward are intended for resale.

Remember To Verify Any Tax Resale Certificate Presented To You

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Do Not Overlook Michigan

Michigan might not be the first state you think about to start a small business but it definitely should be at the top of your list. Michigan has a lot of great things to offer new entrepreneurs which include:

• Reasonable Cost Of Living
• Nurturing Business Friendly Communities
• A Good Compensation Model

Reasonable Cost Of Living

The real estate prices in Michigan are actually 400 percent less than the San Francisco and Silicon Valley areas. Michigan is actually one of the most affordable places to live in the United States. The region’s affordability does not mean a sacrifice in the quality of life. Michigan is able to boast of awarding-winning schools, outstanding health care, and vibrant downtowns.

Nurturing Business Friendly Communities

Small businesses make up at least 99.6 percent of all of Michigan’s businesses, and nearly half of residents who work in the private sector are employed by small business owners. Michigan has a business-friendly environment that has supported small business growth. This has led to opportunities abound in the automobile, manufacturing, and cybersecurity industries.

A Good Compensation Model

Michigan has a talented workforce that has a high level of college graduates in the 24-65 age range. Most of the small business owners are required to carry workers’ compensation insurance. Michigan workers’ compensation is a great tool to help shield small businesses when an employee gets injured at the workplace. Workers’ comp provides pay and medical benefits to employees who have a work-related injury.

What is A Tax Resale Certificate?

It is critical that you understand that tax resale certificates can also be used on items that will be resold. Office supplies, such as new computers for your employees, would not fall under the category of retail.  It would be considered fraud not to pay sales tax on these items.

If this is confusing for you, just think of tax resale certificates as state tax exemption certificates.  Some states actually call them exemption certificates or reseller’s permits.

Getting Started In Michigan

In Michigan a tax resale certificate is called aMichigan Sales and Use Tax Certificate of Exemption  Before a business starts to sell any type of taxable products or services,they must first get a Michigan Sales Tax License from the Michigan Department of Treasury. The Sales Tax License is sometimes referred to as a seller’s permit, sales tax number, or sales tax permit and is valid for up to 4 years.

Is The Tax Resale Certificate The Same As A Sale’s Tax License?

It is important not to confuse a tax resale certificate with a sales tax license. A sales tax license allows a retailer to charge tax on items that they are going to sell to a customer. A tax resale certificate allows you to buy items that are intended for resale without paying a sales tax on those items. 

Does A Vendor Have To Accept My Tax Resale Certificate?

It is extremely important to a retailer’s bottom line that they do not pay sales taxes on goods if there is a possibility that the tax can be exempted on a state level. However, it is also crucial to understand that a wholesaler is not required to accept your tax resale certificate in some states. 

Remember To Verify Any Tax Resale Certificate Presented To You

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

We Give You The Assistance You Need

At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

We provide a tax resale certificate for the top states that include:

• California
• Texas
• Massachusetts
• New York
• New Jersey
• Illinois
• Florida

We know that there is a lot of confusion in the world right now. Luckily, these tax credits will help ease some of the burdens. A tax resale certificate is a fantastic way to make sure your business is in great shape to take advantage of consumer demand once the dust settles. We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence. 

Tax Resale Certificates

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

In New Jersey, Make Sure that Your Purchases Qualify For Sales Tax Exemptions

Again, only purchases that will be resold exactly as they are or will make up materials for products your business makes or repairs qualify for sales tax exemptions in New Jersey.

The following will not qualify:

• Office supplies
• Tools and equipment used by your business
• Materials and services used for capital improvements to your business
• Anything for your personal use
• For example, if you make clothes for your store, you don’t have to pay sales tax on purchases of fabric, but you do have to pay it on the needles you use to sew the garment.

Make Sure You Have the Proper New Jersey Forms

If you are an out of state seller, you will need to present Form ST-3NR to sellers in order to obtain the sales tax exemption. If you are an in-state seller then you need to present Form St-3.

Both these forms will require you to have a tax identification number from the state. This identification number indicates that you have received a permit to collect sales tax from the state of New Jersey. However, if you are not registered in New Jersey to collect sales tax then you can substitute the tax identification number with a number from another state or your federal employer identification number.

The New Jersey Division of Taxation regulates that a business has to keep the certificate on file for 4 years from the date of the transaction so that it can be inspected if necessary.

.Does A New Jersey Vendor Have To Accept My Tax Resale Certificate?

It is extremely important to a retailer’s bottom line that they do not pay sales taxes on goods if there is a possibility that the tax can be exempted on a state level. However, it is also crucial to understand that a wholesaler is not required to accept your tax resale certificate in some states. 

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

Do Big Box Stores Usually Accept Tax Resale Certificates?

A retailer should also be aware that many Big Box Stores such as Walmart or Target refuse to honor tax resale certificates to prevent retail arbitrage. Retail arbitrage is buying a rare item from a store and reselling it for a markup.

What Information Do I Need For The Tax Certificate Registration Form?

You must provide the following information:

• The name and address of the purchaser
• The name and address of the seller
• The registration number of the purchaser
• An accurate description of property purchased for resale
• The reason for the exemption
• A statement that if the property is put to use in a taxable manner that the purchaser will remit the consumer use tax
• Date and Signature and Title of the authorized individual at the purchaser

What Is A Consumer Use Tax?

A consumer has to pay taxes from purchases made from local retailers. This is often called a sales tax and is charged in 45 states. This money is usually collected on behalf of the state by the seller.

Consumer use tax is when the retailer does not charge the appropriate tax and therefore the sales tax is paid directly by the consumer to the state. This usually happens when something is purchased online or from a catalog. In these instances, the vendor does not have a set location in the state, so the sales tax can not be collected from the vendor.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. Unfortunately, the rules of Tax Resale Certificates can vary greatly by the state which can be very confusing

At Tax Resale Certificate,  we make the process as easy as possible. We know that a hard-working entrepreneur has a million jobs and it is smart to take advantage of our expertise.  Just Our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

What is A Tax Resale Certificate?

It is critical that you understand that tax resale certificates can also be used on items that will be resold. Office supplies, such as new computers for your employees, would not fall under the category of retail.  It would be considered fraud not to pay sales tax on these items.

If this is confusing for you, just think of tax resale certificates as state tax exemption certificates.  Some states actually call them exemption certificates or reseller’s permits.

As a savvy business retailer, it is important that you are aware of how to utilize tax resale certificates to your best advantage. In short, a retail certificate allows you not to pay sales tax on items that you plan to resell. This can also apply to supplies that are going to be used in products that you will resell such as wood for a cabinet. This is a significant saving and can save your business a ton of money if utilized properly. Our article Everything You Need to Know About Tax Resale Certificates will give you an in-depth rundown about how these types of certificates can help your business.

Unfortunately, the rules of Tax Resale Certificates can vary greatly by the state which can be very confusing. Our site makes the process as easy as possible. Just take advantage of these user-friendly options to help take the headache of applying for a tax resale certificate off your plate.

Getting Started In Connecticut

First, your business must get a Connecticut Sales Tax Permit from the Connecticut Department of Revenue Services. This sales tax permit can also be called a seller’s permit, sales tax number, or sales tax license. After registering, a sales tax number will be provided by the Department of Revenue Services. This number will be listed on the Resale Certificate.

The Documents Can Become Confusing In Connecticut

Sometimes it is hard to keep track of the different documents. You must make sure to understand that the Sales Tax Permit and the Resale Certificate are completely separate documents. 

A Retail Certificate will allow you to exempt purchases from sales tax as long as you intend to resell the item. The Sales Tax Permit allows a business to sell and collect sales tax from taxable products and services in the state.

How Do I Know If I Need To Pay Sales Tax In A Given State?

In order to establish whether or not a state can impose a sales tax upon your business there first needs to be nexus. Nexus relating to state sales tax is established by a connection between the state and your business. How this connection is defined has been subject to fairly recent changes that reflect changes the way business is conducted in modern times.

Traditionally, nexus has been established by the business actually having a physical presence in the state. However, due to the explosion of e-commerce, physical presence within a state is no longer a requirement for sales tax nexus. In the case of South Dakota v. Wayfair, the courts actually eliminated physical presence as the major requirement for creating nexus. It still should be noted that physical presence is considered an important requirement to allow a state to collect sales tax and is still one of the first considerations for sales tax.

Nexus

Nexus is defined as having a presence or a significant connection to a state. Your sales tax obligations can change significantly depending on the state. Most of the time, however, a mere economic connection to a state is enough to create nexus.

State connections include:

• Having offices in the state
• Warehouses and distributors located in the state  
• Employees
• Affiliates located in the state
• Making a certain amount of money or transactions in a state 
• Doing physical business in a state for some time 

Connecticut Is A Great Place For Businesses

There are many reasons why businesses flock to Connecticut. The state is known for having an excellent education system. This results in a very talented and skilled labor force. Connecticut is also known for its high standards of living which makes it a great place to establish a family and find careers with bright futures. The last decade ended with Connecticut showing that business profitability at an all-time high. More companies in the state were expanding and almost 90 percent said they were doing well.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner. More importantly, if you misunderstand or wrongly fill out incorrect forms you could be subject to heavy penalties as well as miss out on some very important reselling tax advantages.

That Is Why We Are Here To Help

Unfortunately, the rules of Tax Resale Certificates can vary greatly by the state which can be very confusing. On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. We understand that as a busy entrepreneur, you have a million things to worry about with each passing day. You do not want to miss out on the savings that come with a resale certificate

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else. Our site makes the process as easy as possible. Just take advantage of these user-friendly options to help take the headache of applying for a tax resale certificate off your plate.

Tax Resale Certificates

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

New York

Like most states, NY permits resellers to get items tax-free if the products are to be resold. Such items must then be documented on a replacement York resale certificate. In order for your business to participate, you’ll need to register as a seller and acquire a Sales Tax Certificate of Authority, which provides you permission to gather sales tax. You can then apply for the NY resale certificate, also called a nuisance tax exemption certificate.

Obtaining a Certificate of Authority

In New York, if you have a connection to the state (see more on this below) and sell taxable services or tangible property—even from a home-based business or temporarily, such as at craft fairs—the state requires that you register with the state Department of Taxation and Finance using the Business Person and Responsible Contact Questionnaire (Form DTF-17.1) to obtain a Sales Tax Certificate of Authority before opening up shop.

Tangible property includes physical items, such as artwork, flowers, clothing, and motor vehicles. Many services that involve repairing or maintaining the tangible personal property and real property, such as car repair, dog grooming, and snow plowing, are also subject to sales tax.

The requirement to register as a vendor in New York also applies if you have “some additional connection with the state,” which includes maintaining a place of business, soliciting business in the state through employees or agents, or regularly delivering products to customers in the state using your own vehicle, even if you are an out-of-state vendor. Moreover, if you sell through catalogs but have such a connection with the state, operate a hotel, or receive amusement charges, you must also register your business in New York.

If you are an out-of-state vendor without ties that require you to register with the state, you do not need a Certificate of Authority to use a resale certificate. Instead, you may use a Resale Certificate (Form ST-120), but you must supply your registration number from the state in which you have registered your business to collect sales tax.

For more information about who must register as a vendor in New York, see the state’s Tax Bulletin (ST-175).

New York Resale Certificate (Form ST-120)

Once your business is registered with the state and features a Certificate of Authority, you’ll use a Resale Certificate to get items without paying sales tax, as long as you intend to resell them and collect sales tax from buyers.

Within 90 days of purchase, you want to provide the vendor with a resale tax certificate. You can use a “blanket certificate” if you make any purchases from the same seller. New York has several different kinds of exemption certificates, so you must be sure you’re using the correct one for the transaction type. All exemption certificates require specific information, including both the purchaser’s and seller’s names and addresses, date, and purchaser’s signature. Note that the state also accepts electronic nuisance tax exemption certificates.

There are no fees associated with obtaining a Certificate of Authority or using a resale certificate.

New York takes operating without a Certificate of Authority seriously: violations could result in a penalty of up to $10,000.

Expiration of a New York Resale Certificate

While a resale certificate itself doesn’t expire, a Certificate of Authority is valid for a maximum of three years and is “renewable at the discretion of the Department of Taxation and Finance.”

Determining whether you need to collect sales tax in New York and how to do it properly can be complicated, particularly as a reseller, so you may wish to consult an attorney or online service provider to help you through the process.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Make certain that the certificate is properly filled out and signed by the business owner
• You should be able to verify the certificate online by using the certificate
• You should also be able to verify online if the certificate has expired
• Be award of purchase that seem suspicious and do not relate to the customer’s business in a logical manner
• It is important that you keep the certificate on file for at least 5 years in case of a tax audit.

Make Sure You Understand The Specific Guidelines Of Your State

A tax resale certificate is a wonderful way a business can avoid unnecessary taxes. However, we understand that there are a lot of rules and regulations, which can be very confusing to any business owner.

That Is Why We Are Here To Help

It is understandable that all this information can be very daunting. Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. 

Tax Resale Certificates

A tax resale certificate allows you to not pay sales tax on items that you simply decide to resell. This will also apply to supplies that are getting to be utilized in products that you simply will resell, like wood for a cupboard.

It is critical that you simply understand that tax resale certificates also can only be used on items that will be resold. Office supplies, like new computers for your employees, wouldn’t fall into the category of retail. It can be considered fraud to not pay sales tax on these things.

If this is confusing for you, just consider tax resale certificates as state tax exemption certificates. Some states actually call them exemption certificates or reseller’s permits.

Georgia

A tax resale certificate is called a Georgia Sales Tax Certificate of Exemption. It is critical that you understand that tax resale certificates can also be used on items that will be resold. Here is a list of common items that are not eligible for the resale exemption:

• Goods you or your employees purchase for private use.
• Goods your business gives away for free of charge or as gifts.
• Goods your business uses to conduct business, like office supplies, equipment, etc.
• Goods your business rents to be used and not for re-leasing.

How Do I Know If I Need To Pay Sales Tax Georgia?

In order to establish whether or not a state can impose a sales tax upon your business there first needs to be nexus. Nexus relating to state sales tax is established by a connection between the state and your business. How this connection is defined has been subject to fairly recent changes that reflect changes the way business is conducted in modern times.

Traditionally, nexus has been established by the business actually having a physical presence in the state. However, due to the explosion of e-commerce, physical presence within a state is no longer a requirement for sales tax nexus. In the case of South Dakota v. Wayfair, the courts actually eliminated physical presence as the major requirement for creating nexus. It still should be noted that physical presence is considered an important requirement to allow a state to collect sales tax and is still one of the first considerations for sales tax.

What Are The Different Methods In Which The States Establish Sales Tax Nexus?

The definition of sales nexus can vary greatly from state to state. Here is a list of the different ways in which states can determine sales tax nexus:

• Click-Through Nexus legislation
• Affiliate Nexus legislation
• Marketplace Nexus legislation
• Notice and Reporting Requirements
• Economic Nexus 

Click-Through Nexus legislation- This usually requires a remote seller to meet a minimum sales requirement in the state resulting from an in-state referral agent who is a resident of the state. The agent must be making commission payments to the referral agent for any sales that are the result of the click-through referrals from the agent’s website. 

Affiliate Nexus legislation– A remote retailer holds a substantial interest or is owned by a retailer that is located within the state and sells a similar type of product under a similar business name. Instate retailers can also be used to promote or market the product to in-state customers. Affiliate nexus does not require common ownership and may not include services such as sales and delivery.

Marketplace Nexus legislation– This definition applies to marketplace facilitators who operate a business in the state and provides e-commerce infrastructure, customer service, payment processing, and marketing services to individual sellers. The facilitator is the one that is required to register with the state and collect the sales tax rather than the individual sellers.

Notice and Reporting Requirements– This legislation requires that a retailer does not collect the state sales tax themselves but notify their buyers that they must report state use tax on all their purchases. The retailer might be required to send the purchaser a statement of all their purchases.

Economic Nexus- An out-of-state retailer generally is required to collect and remit sales tax once the retailer meets a set level of sales transactions or gross receipts activity (a threshold) within the state. No physical presence is required.

To find out more about state sales tax please visit the sales tax institute.

Remember To Verify Any Tax Resale Certificate Presented To You

In the first part of our series, we mentioned that a vendor can refuse a tax resale certificate. This is because the vendor will be the one liable to the state government should anything be remiss. That is why you should always take the following steps to assure that anything presented to you is valid.

• Goods you or your employees purchase for private use.
• Goods your business gives away for free of charge or as gifts.
• Goods your business uses to conduct business, like office supplies, equipment, etc.
• Goods your business rents to be used and not for re-leasing.

Tax Resale Certificate Is Here To Help

Not correctly understanding sales tax and the benefits of a tax resale certificate can lead to a great deal of trouble. A retailer could lose out on extremely beneficial sales tax exemptions status. A savvy business owner will understand that having a tax resale certificate will save them a good deal of money but leave the actual headache of registration to someone else.

On the other hand, misunderstanding and not paying the correct sales tax to a state government could very much hurt a business’s standing and reputation. At Tax Resale Certificate,  we make the process as easy as possible. Just take advantage of our user-friendly interface to help take the headache of applying for a tax resale certificate off your plate. This way you can completely focus on the great opportunities presented by your amazing business.

Illinois Is Booming

There are more than 1.2 million small businesses operating in the state of Illinois. These businesses employ 2.5 million people, which is 45.1% of the state’s workforce and nearly 20% of the whole population. Small businesses account for 99.6% of the state’s private enterprise, making them an important part of Illinois’s economy.

Great Universities And Research

There are more federal research dollars flowing into the universities here than any other region in the U.S. So if you just look at the federal funding–and this is just for Illinois, Michigan, Wisconsin, those three alone receive over $2 billion a year in U.S. federal funding. And it depends on the year, but they’re number three, four and five within the U.S. in research funding.

What is A Tax Resale Certificate?

It is critical that you understand that tax resale certificates can also be used on items that will be resold. Office supplies, such as new computers for your employees, would not fall under the category of retail.  It would be considered fraud not to pay sales tax on these items.

If this is confusing for you, just think of tax resale certificates as state tax exemption certificates.  Some states actually call them exemption certificates or reseller’s permits.

Is The Tax Resale Certificate The Same As A Seller’s Permit?

Even though tax resale certificates are called reseller’s permits in some states, it is important not to confuse them with seller’s permits. A seller’s permit allows a retailer to charge tax on items that they are going to sell to a customer. A tax resale certificate allows you to buy items that are intended for resale without paying a sales tax on those items. 

Does A Vendor Have To Accept My Tax Resale Certificate?

It is extremely important to a retailer’s bottom line that they do not pay sales taxes on goods if there is a possibility that the tax can be exempted on a state level. However, it is also crucial to understand that a wholesaler is not required to accept your tax resale certificate in some states. 

What If A Customer Presents Me With A Tax Resale Certificate? 

A customer can also present a tax resale certificate to you as a retailer and it is your discretion of whether or not you want to exempt them from the required sales tax. It is always a good idea to check on the certificate because you will be held responsible, if the certificate is expired or fraudulent, for the unpaid state sales tax. Verification is key in making sure that the correct due diligence has been completed to authenticate the tax resale certificate.

 The Various State Tax Laws Can Be Confusing

Each state has its own unique tax laws related to retail sales tax that are constantly changing. There are many different definitions of what is nexus and what manner of tax resale certificates are acceptable. Some states accept resale documentation from other states, while many do not.

Third-party fulfillment companies make this even more difficult to comprehend.  A large company like Amazon can have one shipment travel through a dozen states, which can often trigger nexus.

Illinois

Before you’ll use a resale certificate, you want to register your business with the state. This process varies depending on what type of company you have. For more detailed information on how to register your business in Illinois, see the Department of Revenue’s instructions. Note that you simply could also be liable for filling out other tax forms also.

After registering your business, you will receive an Illinois Certificate of Registration, which allows you to conduct business responsible for remitting sales taxes to the state. You must then display the certificate prominently in your home or business. Certificates of Registration are renewed automatically so long as you are up-to-date on filing and payment obligations.

The instructions for a way to use for a resale certificate in Illinois are fairly straightforward since you do not even need to send anything to the state. You are in charge of keeping track of your purchases, as described in more detail below.

How to Use a Resale Certificate

Once your business is registered as a reseller with the Illinois Department of Revenue, you want to keep track of your tax-exempt purchases on a resale certificate. Certificate of Resale (Form CRT-61) provides an easy way for you to do this, although you may use your own form so long as it contains all of the required information. No matter which format you employ, you want to provide the retailer with a replica.

On the form, you must include the name and business addresses of both the seller and purchaser. You must also include your retailer account ID number and/or your reseller number.

What could be tricky is making sure your purchases actually qualify as exempt from sales, so be sure to read the Department of Revenue’s definitions regarding sales and use taxes carefully.

Expiration of Illinois Resale Certificates

The Illinois Department of Revenue notes that resale certificates documenting tax-exempt purchases must be updated a minimum of once every three years.

If you’d like to have some peace of mind that you’re complying with all applicable tax rules, you might consider working with an attorney or legal document preparation service, which can guide you through the process.

Do Not Get Frustrated.

We understand that this is a whirlwind of information that can be very frustrating. There are great differences between states and you do not have the time to sort this out and properly run your business. That is why TaxResaleCertificate should do all the hard work for you. We can make sure that you get all the advantages of a tax resale certificate without having to deal with the hassle of government red tape. Let us handle the hard stuff so you can proceed to run your business with confidence. Make sure you check out our other blogs in this series so you can learn even more valuable information about tax resale certificates.