What is a resale certificate and how to get one in 2023?

A resale certificate is an official document that easily instills confusion in many online resellers. Depending on the state you live in, it can also be called a reseller’s permit, reseller’s license, reseller’s certificate, resale license, sales tax ID or sales tax permit. 

Whatever you call it, it serves the same purpose – it helps you avoid paying tax that you do not need to pay. Needless to say, that makes it very important. The resale certificate works in favor of the reseller, which is why we, the 888 Lots team, require that you have one in order to do business with us. 

What is a resale certificate?

Let’s start with what sales tax is. Sales tax is a form of tax collected by a governing body for the sales of certain goods. Each state has its own sales tax laws and therefore rates differ from state to state. 

US-based resellers do not need to pay sales tax for the products that they purchase from wholesalers, for example, and sell to their customers. Instead, the sales tax is paid by the customers when they buy the product. The reseller collects the money and sends it to the state according to a predetermined schedule, usually monthly, quarterly or annually. In order to get exempt from paying sales tax when buying from 888 Lots, for instance, you need a resale certificate. 

Sales tax nexus

A sales tax nexus “also known as sufficient physical presence, is the determining factor of whether an out-of-state business selling products into a state is liable for collecting sales or use tax on sales into the state”. 

The term “sufficient physical presence” is what confuses most people and with reason – this rule can also vary between states. The simple rule to remember is that you have a nexus in a state if you do any of the following in that state: 

• have an office 
• have a warehouse 
• have an employee 
• have an affiliate 
• store inventory 
• temporarily do physical business – trade show, fair, etc. 
• drop shipping from a 3rd party provider 

The rule to abide by is that you should collect sales tax for a state if you have a nexus present there. Take a look at TaxJar’s extremely helpful list of states and see what creates a nexus in each.  

As mentioned before, it is the customers who pay the sales tax. Just remember that you need to make sure you collect the correct amount of sales tax if you don’t want to be held accountable for the difference if you come up short. So, if you want to have sales tax under control, we’ve prepared for you 5 ways to save time and energy handling sales.  

Now that we made things clear, the next question is… 

Which state’s tax rates should you charge?

There are two types of states in this case – origin- and destination-based sales tax states. The name pretty much explains it. If you are located in an origin-based state you would collect sales tax at the rate of where your office/warehouse is (the origin of the sale). The sales tax could be the sum of state, county, city and district rates. 

If you are located in destination-based state, you would collect sales tax at the rate of where the buyer is (the destination of the sale). The sales tax could be the sum of state, county, city and district rates. 

Look at where you are located on the map to find out which type of tax you need to collect. 

Things are a little different for Amazon FBA sellers. They are considered ‘remote sellers’. This is if you are based in one state but also have a nexus in another state, without being based there. This happens when you ship to Amazon FBA centers located in states other than where you are. 

In this case, only 3 states are considered origin-based: Arizona, California and New Mexico. 

In this set of Marketplace Sales Tax Collection rules, you need to look at which state your FBA center that you ship to/from is located, and not where your business is located. 

How to apply for a resale certificate?

So, how do you apply for such a certificate?  

Let’s go through the process step-by-step! 

Step 1: Figure out which states you need a Reseller’s Permit for 

 As mentioned previously, the laws vary from state to state. The best thing to do is turn to your local tax office or your lawyer. 

By rule, you need a resale certificate for every case where you need to collect sales tax. You need to collect sales tax for every state where you have a nexus. So, accordingly, you need to have a resale certificate for the state you are based in and every state that you ship inventory to Amazon Fulfillment centers. 

There are five states that do not have sales tax and do not require (or sometimes do not even issue one). These are Alaska, Delaware, Montana, New Hampshire, and Oregon. However, it is important to note that Alaska and Montana allow localities to charge sales taxes. 

If you live in any of the other states, follow the links below to find out more. 

1. Alabama – Does not accept out of state resale certificates.
2. Alaska – While Alaska does not have a state sales tax, some local jurisdictions within the state do have local sales tax. Check here https://arsstc.org/exemption-certificate-directory/
3. Arizona – In Arizona, registration with the state is not necessary to obtain a resale certificate. It is possible to use an out-of-state sales tax license number when filling out these forms. To obtain a resale certificate in Arizona, you can complete one of the following forms:
   • Arizona Resale Certificate (Form 5000A)  https://azdor.gov/forms/tpt-forms/arizona-resale-certificate
   • Multistate Tax Commission’s Uniform Sales and Use Tax Certificate http://www.mtc.gov/Resources/Uniform-Sales-Use-Tax-Exemption-Certificate
   • Border States Uniform Sale for Resale Certificate (Form 60-0081) https://azdor.gov/forms/tpt-forms/border-states-uniform-sale-resale-certificate-english-only-fillable
     
     It’s also worth noting that some blanket certificates may be valid for a specific timeframe that is shorter than twelve months, so be sure to review the terms of your certificate to determine when it needs to be renewed.
4. Arkansas – You should check with the Arkansas Department of Finance and Administration to determine if you are required to have a resale certificate and to learn more about the process for obtaining one. A certificate in Arkansas will expire if not used within a twelve-month timeframe. You may also use an out-of-state sales tax license number on these forms. To get a resale certificate in Arkansas, you may fill out:
   • Arkansas Exemption Certificate (Form ST 391) https://www.dfa.arkansas.gov/images/uploads/exciseTaxOffice/ExemptionCertificate.pdf
   • Streamlined Exemption Certificate Form https://www.streamlinedsalestax.org/Shared-Pages/exemptions
5. California – Does not accept out of state resale certificates and requires registration with the state for a resale certificate. You will need a seller’s permit number. California resale certificate does not have an expiration date. Check the form:
   • California General Resale Certificate (CDTFA-230) https://www.cdtfa.ca.gov/formspubs/cdtfa230.pdf
6. Colorado – In Colorado, you do not need to register with the state for a certificate. Certificates from Colorado do not expire.
   • Colorado Sales Tax Exemption Certificate Multi-Jurisdiction Form (DR 0563) https://tax.colorado.gov/sites/tax/files/DR0563_2013.pdf
7. Connecticut – No registration with the state of Connecticut is required to obtain a certificate. A resale certificate should be renewed every three years from the date of issue. To get a certificate fill out the form:
   • Connecticut Sales & Use Tax Resale Certificate https://portal.ct.gov/-/media/DRS/Forms/1995Forms/Resale-Certificate.pdf?la=en
8. District of Columbia – In the District of Columbia, you are required to register with the district. The certificate is valid for one year and you can visit the link to check out the form:
   • District of Columbia Sales & Use Tax Certificate of Resale (OTR-368) https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/MyTax.DC_.gov%20-Certificate%20of%20Resale%20OTR-368%20Guide.pdf
9. Delaware – There is no state sales tax and certificate.
10. Florida – Does not accept out of state resale certificates and requires registration with the state. The certificate is annual and should be issued for one calendar year.
    • Florida Department of Revenue https://floridarevenue.com/Pages/forms_index.aspx
11. Georgia – Georgie does not need registration for a resale certificate and the certificate doesn’t expire. Check the appropriate form for your business:
    • Georgia Certificate of Exemption (ST-5) https://dor.georgia.gov/st-5-certificate-exemption
    • Multistate Tax Commission’s Uniform Sales and Use Tax Certificate http://www.mtc.gov/Resources/Uniform-Sales-Use-Tax-Exemption-Certificate
12. Hawaii – Hawaii requires registration and does not accept out of state resale certificates. The certificate does not expire. Check the form:
    • Resale Certificate Form (G-17, G-18, or G-19) https://tax.hawaii.gov/forms/a1_b2_1geuse/
13. Idaho – No registration with the state and the certificate does not expire. Check the form:
    • Idaho Sales Tax Resale or Exemption Certificate (Form ST-101) https://tax.idaho.gov/s-results-form.cfm?doc=EFO00149
14. Illinois – Does not accept out of state resale certificates. The certificate should be renewed every three years. Registration to state is required unless you purchase and sell outside Illinois.
    • Illinois Certificate of Resale (CRT-61) https://www2.illinois.gov/rev/forms/sales/Documents/sales/crt-61.pdf
15. Indiana – There is no registration requirement in the state. Resellers certificate does not expire in Indiana.
    • Indiana General Sales Tax Exemption Certificate (ST-105) https://www.in.gov/dor/tax-forms/sales-tax-forms/
16. Iowa – State registration is not required. The certificate is valid for 3 years since the initial issue.
    • Iowa Sales/Use/Excise Tax Exemption Certificate 31-014 https://tax.iowa.gov/sites/default/files/2019-11/IowaSalesTaxExemptionCertificate(31014).pdf
17. Kansas – There is no registration requirement in the state. The certificate will not expire if recurring business relationship exists. Which according to the state of Kansas is a deal every 12 months.
    • Kansas Resale Exemption Certificate ST-28A https://www.ksrevenue.gov/forms-btsaleex.html
    • Kansas Multi-Jurisdiction Exemption Certificate ST-28M https://www.ksrevenue.gov/forms-btsaleex.html
    • Kansas Streamlined Sales and Use Tax Agreement PR-78SSTA https://www.ksrevenue.gov/forms-btsaleex.html
18. Kentucky – No registration is required by the state. Certificate does not expire.
    • 270 Resale certificate and certificates of exemption https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=52085 https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=49173
19. Louisiana – Does not accept out of state resale certificates and state registration is required. The certificate will be automatically renewed if there is business operation every 12 months, but no longer then 2-3 years.
    • Download the resale certificate from https://www.revenue.louisiana.gov/SalesTax/ResaleCertificate only after registration with the state.
    • Remote sellers https://remotesellers.louisiana.gov/Documents/Resale%20Certficate.pdf
20. Maine – State registration is not required. The certificate is valid for 3-5 years. Maine is slightly different you will get a certificate immediately when you make more than 3000 USD gross sales per year. If you didn’t reach this number, you may fill out a form:
    • Uniform Sales & Use Tax Certificate Form http://www.mtc.gov/Resources/Uniform-Sales-Use-Tax-Exemption-Certificate
21. Maryland – Does not accept out of state resale certificates. State registration is required, and the certificate does not expire. Tax exemption is not allowed if purchases are below $200. You can fill the suggested resale certificate
    • Suggested Blanket Resale Certificate https://marylandtaxes.gov/forms/compliance_forms/Sample_Resale_Certificate.pdf
22. Massachusetts – Does not accept out of state resale certificates. State registration is required. The certificate is not limited your business should exists and be operational.
    • Massachusetts Sales Tax Resale Certificate ST-4 https://www.mass.gov/lists/dor-sales-and-use-tax-forms#sales-and-use-
23. Michigan – No registration is required by the state. The certificates in Michigan are issued for 4 years but will expire earlier if the business is not operational.
    • Michigan Sales and Use Tax Certificate of Exemption (Form 3372). https://www.michigan.gov/-/media/Project/Websites/taxes/Forms/2007/2007_3372.pdf?rev=f31828b81c1a4d1fb3144ca3f47ca7db
24. Minnesota – There is no registration requirement in the state. The resale certificate does not expire.
    • Minnesota Certificate of Exemption (Form ST3) https://www.revenue.state.mn.us/sites/default/files/2019-07/st3.pdf
25. Mississippi – State registration is required. Mississippi does not provide for the use of formal resale certificates. Instead, Mississippi requires resellers who are registered to collect Mississippi sales tax to give vendors their Mississippi resale sales tax number located on the sales tax permit. The business permit should be presented at every renewal to the vendor and the Mississippi business permit should be shown to the vendor also.
26. Missouri – The resale certificate is issued for 5 years. Missouri requires resale certificate only for purchasing services, but not for tangible personal property. Any retailers reselling in Missouri should get a sales tax permit.
    • Sales and Use Tax Exemption Certificate (Form 149) https://dor.mo.gov/forms/?formName=149&category=&year=99
27. Montana – Montana does not have a state sales tax, some local jurisdictions within the state may have local sales tax.
28. Nebraska – No registration is required by the state. If a recurring business relationship exists with at least one sale every twelve months the certificate doesn’t expire.
    • Nebraska Resale or Exempt Sale Certificate for Sales Tax Exemption (Form 13) https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/tax-forms/f_13.pdf
29. Nevada – There is no registration requirement in the state. The resellers certificate does not expire in Nebraska.
    • Nevada resale certificate  https://tax.nv.gov/uploadedFiles/taxnvgov/Content/Forms/Resale_Certificate.pdf
30. New Hampshire – There is no state sales tax and certificate.
31. New Jersey – State registration is not required. The resale certificate will expire only if the general type of purchasing property is changing.
    • Resale Certificate https://www.state.nj.us/treasury/taxation/pdf/other_forms/sales/st3.pdf
    • Resale Certificate for Non-New Jersey Sellers      https://www.state.nj.us/treasury/taxation/pdf/other_forms/sales/st3nr.pdf
32. New Mexico – If the reseller does not have a NEXUS in New Mexico state registration with the state is not required.
    • Multistate Tax Commission’s Uniform Sales and Use Tax Certificate https://www.mtc.gov/Resources/Uniform-Sales-Use-Tax-Exemption-Certificate
    • Border States Uniform Sale for Resale Certificate (Form 60-0081) https://azdor.gov/forms/tpt-forms/border-states-uniform-sale-resale-certificate-english-only-fillable
    • With NEXUS – nontaxable transaction certificate (NTTC) https://www.tax.newmexico.gov/businesses/non-taxable-transaction-certificates-nttc/#:~:text=A%20Nontaxable%20Transaction%20Certificate%20(NTTC,same%20type%20with%20that%20customer
33. New York – No need to register with the state. The certificate will not expire if there is no change in the property purchasing.
    • New York Resale Certificate (Form ST-120) https://www.tax.ny.gov/pdf/current_forms/st/st120_fill_in.pdf
34. North Carolina – No registration is required by the state. No expiration date if the business is making more than one sale for 12 months.
    • Streamlined Sales and Use Tax Agreement Certificate of Exemption Form (Form E-595E) https://www.ncdor.gov/taxes-forms/sales-and-use-tax/sales-and-use-tax-forms-and-certificates/exemption-certificates
35. North Dakota – State registration is not required. The resale certificate doesn’t expire.
    • North Dakota Certificate of Resale (SFN 21950) https://www.tax.nd.gov/business/sales-and-use-tax
36. Ohio – State registration is not required. Ohio certificate has no expiration date.
    • Sales and Use Blanket Exemption Certificate (Form STEC B) https://tax.ohio.gov/business/get-a-form/tax-forms
37. Oklahoma – No registration is required by the state. No expiration conditions on Oklahoma resale certificate.
    • Streamlined Exemption Certificate Form for Oklahoma https://www.streamlinedsalestax.org/Shared-Pages/exemptions
38. Oregon – There is no state sales tax and certificate.
39. Pennsylvania – No need to register with the state. No expiration date for the resellers certificate.
    • Pennsylvania Exemption Certificate (Form REV-1220) https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/SUT/Documents/rev-1220.pdf
40. Rhode Island – State registration is not required. If there is no change in business the resale certificate will be valid.
    • Rhode Island resale certificate https://tax.ri.gov/sites/g/files/xkgbur541/files/forms/1997/excise/resale.pdf
    • Streamlined exemption certificate form for Rhode Island https://tax.ri.gov/tax-sections/sales-excise-taxes/streamlined-sales-tax
41. South Carolina – No need to register with the state. The certificate do not expire.
    • South Carolina Resale Certificate (Form ST-8A) https://dor.sc.gov/forms-site/Forms/ST8A.pdf
42. South Dakota – There is no registration requirement in the state. The certificate do not expire.
    • South Dakota Exemption Certificate (Form 2040) https://dor.sd.gov/businesses/taxes/sales-use-tax/#exempt
43. Tennessee – State registration is not required. Three main scenarios are valid for Tennessee. A foreign seller that is not registered in the United States can use a fully completed Streamlined Sales and Use Tax Exemption Certificate, along with a tax ID number from their home country, to purchase tax-free products from a Tennessee supplier and have them shipped directly to a Tennessee consumer.
    If a Tennessee supplier sells tangible personal property or taxable services to an out-of-state dealer for resale and drop ships the goods to the out-of-state dealer’s Tennessee customer, the Tennessee supplier may accept a resale certificate issued by another state or a Streamlined Sales and Use Tax Exemption Certificate that includes the sales tax ID number issued by the other state in order to make tax-free drop-shipped sales.
    An out-of-state seller who is not registered for sales tax may provide a Tennessee supplier with a Streamlined Sales and Use Tax Exemption Certificate that includes a tax ID number for another tax type (e.g., business tax or excise tax) issued by their home state or their federal identification number (FEIN). This will allow the out-of-state dealer to make tax-free purchases from the Tennessee supplier.
44. • Streamlined Sales and Use Tax Exemption Certificate https://www.streamlinedsalestax.org/docs/default-source/forms/exemption-certificate.pdf
45. Texas – There is no registration requirement in the state. Texas resale certificate is valid unless revoked in writing.
    • • Texas Sales and Use Tax Resale Certificate (Form 01-339) https://comptroller.texas.gov/search/?site=ctg_collection&q=01-339
46. Utah – State registration is not required. If a recurring business relationship exists the certificate will be valid.
    • Utah Exemption Certificate (Form TC-721) https://tax.utah.gov/forms/current/tc-721.pdf
    • Streamlined Sales Tax Agreement Certificate of Exemption https://www.streamlinedsalestax.org/docs/default-source/forms/exemption-certificate.pdf?Status=Temp&sfvrsn=e02b70bc_4
    • Uniform Sales & Use Tax Certificate Form https://www.mtc.gov/Resources/Uniform-Sales-Use-Tax-Exemption-Certificate
47. Vermont – State registration is not required only for drop shippers. If you are not going to change the type of the purchasing property, the certificate will be valid.
    • Vermont Sales Tax Exemption Certificate for Purchases for Resale And By Exempt Organizations (Form S-3) https://tax.vermont.gov/business/nonprofits/exemption-certificates
48. Virginia – State registration is required. Certificates are revoked only by Department of Taxation.
    • Virginia Sales and Use Tax Certificate of Exemption (Form ST-10) https://www.tax.virginia.gov/forms/search?search=st-10&year=All&category=5&type=All
49. Washington – No need to register with the state. Does not accept out of state resale certificates. A certificate will last 4 years unless there is no expiration date.
    • If there is a state registration you will need Washington reseller permit https://dor.wa.gov/taxes-rates/retail-sales-tax/reseller-permits
50. West Virginia – State registration is not required. No expiration date on the certificate.
    • Streamlined Sales and Use Tax Exemption Certificate. https://www.streamlinedsalestax.org/Shared-Pages/exemptions
51. Wisconsin – There is no registration requirement in the state. Resale certificate will expire only with written revoke.
    • • Wisconsin Sales and Use Tax Exemption Certificate (Form S-211). https://www.revenue.wi.gov/search/Pages/forms.aspx?k=s%2D211
52. Wyoming – No need to register with the state. No expiration dates.

• • Streamlined Sales Tax Agreement Certificate of Exemption https://revenue.wyo.gov/divisions/excise-tax/streamlined-sales-tax-project

Step 2: Prepare the documents you need to register for a sales tax permit 

Depending on the state you’re applying for, you may be asked to provide some personal data and different type of information related to your business. If you’re curious to discover what documents you need to prepare, TaxJar’s article explains how you can register for sales tax permit in every state.  

Step 3: Fill out your application 

Alright! Now that you’ve collected the information you need, you’re ready to apply for your reseller’s permit. In fact, you can do it either online or in person. As we already mentioned, you need to apply for a reseller’s permit in all of the US states where you run a business. Also, you should be aware that you’ll probably have to pay a small fee to file your application. 

For more information on how to get a resale certificate, consult your local state department. 

Do you have to renew your sales tax permit? 

Some of these states require you to renew your certificate after a certain amount of time, while others do not. TaxJar has an extensive and very useful list with all the information. 

At 888 Lots we require a valid resale certificate from the state you are located in. We will keep you certificate on file after your first purchase with us, so you do not need to present it every time.