Resale Certificate Requirements

A resale certificate is one which can be used and need to be possessed by buyers who would like to buy the goods for resell. The resale certificate is necessary to make sure that the goods and services that are being bought would not be consumed by the business but would pass them on to the other end customers. The below are more details about the resale certificate requirements.

Minimum criteria to be met by all Resale certificate applicants:

The minimum criteria that have to be met by all the resale certificate applicants are mentioned below in detail:

a)      In order for the business to stay away from paying sales tax, they should produce the resale certificate to the party from which it is buying

b)      If the firm is not able to show the resale certificate immediately, a time period is given within which the resale certificate has to be shown

c)      The seller is required to retain a photocopy of the buyer’s resale certificate for check and audit purposes

d)     With the help of a resale certificate, the firm can purchase goods and services in bulk

e)      The resale certificate can only be obtained by either filling a resale application form (in case of wholly owned businesses) or can be obtained by writing letters and getting them signed (in case of owed businesses). In some cases even a memorandum of understanding will do.

Other requirements to obtain a Resale certificate:

  1. Businesses that do not possess the resale certificate are required to pay sales tax which is dependent on the location.
  2. The application for the resale certificate should contain the name of the buyer and the seller along with the business address of the buyer.
  3. There is a field which would mandate the buyer to specify his resale certificate permit number. This field is required to be complete and accurate otherwise the sales purchase will be rejected.

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