What is a resale certificate and who can use one?
Resale certificates are used by purchasers, when acquiring property for resale in its present form or as components of other property. They are also used to purchase taxable services that become a part of property for resale in some states. States that allow for resale exemptions either accept a state issued resale certificate or, in some cases, a multi-state certificate. A business which is registered for sales and use tax can use a resale certificate only when the merchandise being purchased is to be resold by the business. A business cannot use a resale certificate to purchase merchandise that they will use and consume in the conduct of business. Any merchandise obtained upon resale certificate is subject to sales and use tax if it is used or consumed by the purchaser in any manner, and must be reported and the tax paid thereon direct to the appropriate jurisdiction.
Related Questions
- Can an individual tavern owner bring a resale certificate into a grocery store and purchase alcohol/beer exempt from sales tax if their tavern ran out of an item?
- Can a Connecticut business use a resale certificate to purchase goods and services for use by the business?
- What is a Resale Certificate or Public Offering Statement?
