Sales Tax
Resale Certificates: When and How to Use One
Short answer
A resale certificate is a document that tells your supplier you are buying for resale, so they should not charge you sales tax. You then collect sales tax from the end customer. It is free to get from your state's Department of Revenue.
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).
- Download your state's resale certificate form (sometimes called a reseller's permit or exemption certificate).
- Fill it out with your business name, address, and sales tax permit number.
- Provide a signed copy to each supplier you buy from. Keep a copy yourself for 4 years.
When NOT to use it
- Items you consume in your business (cleaning supplies, office paper)
- Tools and equipment you keep
- Anything you do not actually resell
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.
Tax-ready records, automatically.
Glo Invoice tags every expense and 1099 contractor so tax time is a download, not a scramble.
Sources & further reading
Primary sources we consulted when writing and reviewing this guide.