Resale Certificates: When and How to Use One

If you buy parts or materials to mark up and resell to customers — copper pipe, light fixtures, hair products — a resale certificate prevents double taxation. Without one, you pay tax to your supplier AND collect tax from the customer.

• How to get one. Register for a sales tax permit with your state Department of Revenue (free in most states).
• When NOT to use it. Items you consume in your business (cleaning supplies, office paper)

Frequently asked questions

Is a resale certificate the same as a tax ID?

No. A tax ID (EIN) is for income tax and payroll. A resale certificate is specifically for sales tax exemption on inventory.

Do I need one in every state?

Generally yes, if you have nexus and buy inventory in multiple states. Some states accept the Multistate Tax Commission Uniform Certificate.

More taxes guides

• Sales Tax for Service Businesses: A Plain-English Guide
• Sales Tax Nexus: When You Owe Tax in Another State
• Quarterly Estimated Taxes: A Survival Guide for the Self-Employed
• Self-Employment Tax: What It Is and How to Reduce It
• How Much to Set Aside for Taxes (and Where to Put It)
• Schedule C Deductions: The Master Checklist for Service Businesses