Why Register For A Tax Resale Certificate In Texas?

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.