Why Your Business Needs a Massachusetts Resale Certificate
Any business that sells goods within Massachusetts or online to customers located in Massachusetts is required to collect sales tax from the buyer. The Certificate gives you the right to collect tax on your taxable sales and to issue and accept most Massachusetts State sales tax exemption certificates. All businesses that collect sales tax in Massachusetts must pay taxes to the state, and are therefore required to file for a certificate, or may face a penalty.
Does my business require a Tax Resale Certificate?
You may need a Tax Resale Certificate if any of the following describe your business:
- You operate in Massachusetts and/or plan to sell or ship product to another party or customer in Massachusetts
- You have salespersons in Massachusetts – This includes a representative, agent, salesperson, canvasser, independent contractor, or solicitor operating for the purpose of selling, delivering, installing, assembling, or the taking of orders for your business
- Your business has a 3rd party affiliate in the state of Massachusetts
- Your business purchases items for resale in Massachusetts state, including wholesale
I do business online to customers located outside Massachusetts, do I still need to provide the state with my tax information?
Yes! Even if you do not charge sales tax to customers located outside of Massachusetts state, you must report the exempt tax sale to the State of Massachusetts.
My business resells items that I purchase through wholesale - if I’m not paying taxes on wholesale purchases, why is a Tax Resale Certificate required?
All legitimate wholesale companies in Massachusetts require a sales tax resale certificate for purchases, and should require a copy of your resale certificate before they sell to you at wholesale prices as a commercial retailer.
How do I know if the service my business offers is taxable?
Most services in Massachusetts are not taxable, but if your business sells a product with the service you provide, you will need to collect sales tax. For example, an accountant would not need to collect tax for their services, but a business that sells and installs car parts would need to collect sales taxes on the parts sold.