What is a Reseller Certificate? And Why You Need It!

What is a Reseller Certificate?

A Reseller Certificate allows you, through your business, to buy goods without paying tax.  It is your responsibility to collect the applicable taxes from your customers when they order the product from you.  Currently, most states require you to collect taxes from customers who reside in the state your business is registered in. If you need to clarify your State's position on collecting taxes, you should refer to your State's tax webpage for current information.

Who Needs a Reseller Certificate?

Basically, if you purchase products with the intent to resell it to someone else, you should have a reseller certificate.  More importantly, the reseller certificate allows you to do business with wholesalers and distributors who normally require a valid Tax ID to open an account.  The wholesaler will ask you to provide a Resale Certificate as proof that the property is being purchased for resale.  This allows them to sell their products to you without having to collect taxes from you.  Essentially, they're placing the burden of collecting taxes in your hands.  Whatever there reasons, if you don't have a reseller certificate, they're not going to give you business. If you're in the business of selling products online, check your State's taxation website for information on how to obtain a Reseller Certificate.

Do you have a product to sell?

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6 Responses to “What is a Reseller Certificate? And Why You Need It!”

  1. julian says:

    what if i don’t have a business? Can I still buy things to resell in a swatmeet.?

  2. simplywebtastic says:

    IF you buy items through a reseller and do not pay tax upfront for your purchase, it is your responsibility to collect the tax from the person you sell to (at the tax rate for the State you sell it in).

    The reseller certificate just gives you the privilege of purchasing products without paying tax, but once you sell it to a consumer, you must collect the tax.

    I’m not positive, but I believe that if you sell a taxable product at a fair, swapmeet, or other event, you’re suppose to collect tax.

    To the best of my knowledge, the only States that do not currently have a State sales tax are: Alaska, Delaware, Montana, New Hampshire and Oregon. Also, in some cases, sales taxes are also assessed at the county or municipal level.

    Your best bet is to visit your local Taxation website to review the rules for your State.

  3. Armando Armenta says:

    Do I need a reseller certificaton if I buy goods to reselling in mexico country, I do business using the internet but I don’t keep any a the equipment iI just buy for spanic custumers and charge them # to !0 % commision for the good that I buy for them

  4. deepthi says:

    Is there an expiration for the certificate id????

  5. simplywebtastic says:

    Most reseller certificates require a yearly renewal to keep the certificate active. In my state, the yearly fee is $10 and is usually renewed at the beginning of the calendar year.

    dont know about that

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