A state-by-state guide to resale certificates
Sales tax exemptions are a tough nut to crack. Each state has its own rules about what is or isn’t exempt. One of the few things consistent across the board: Resellers can typically skip the tax on goods they’ll be reselling. How that exemption shakes out is a little less uniform.
Most states have their own resale certificates. Others, like Colorado and North Carolina, just use multistate certificates. Mississippi doesn’t even require a certificate, so long as the reseller has a valid sales tax permit.
If you’re buying or selling goods for resale in multiple states, there’s a lot to keep track of.
To that end, here’s an overview of basic resale exemption information, as well as a state-by-state guide to certificate requirements.
What is a resale certificate?
A resale certificate is a document that allows a business to make exempt purchases based on the assumption the goods will be resold and the sales tax will be paid by the end consumer.
Purchasers apply for resale certificates and provide them to sellers at checkout.
Sellers collect and validate certificates prior to exempting tax. Sellers store each certificate, so it’s accessible for future purchases or to validate the exemption if the business is audited.
Drop shipping can further complicate resale certificates or sales tax collection. Things get trickier when you go from a business selling to a customer, to a business purchasing from a drop shipper for delivery to a customer. Who collects what largely depends on who has nexus (and where everyone is located). We cover the sales tax implications of drop shipping in a post of its own.
What’s the difference between an exemption certificate and a resale certificate?
“Exemption certificate” is an umbrella term for any document that allows tax-exempt purchases based on the status or circumstances of the purchaser.
A resale certificate is a type of exemption document.
Can I use the same resale certificate in every state?
No. There’s no one universally accepted resale certificate. However, there are two types of multistate resale certificates:
- Streamlined Sales Tax (SST) Certificate of Exemption
- Multistate Tax Commission (MTC) Uniform Sales & Use Tax Resale Certificate
Not every state accepts these certificates. You’ll need to obtain a valid state-issued certificate in those that won’t accept either.
How does a business get a resale certificate?
To get a resale certificate, a business must obtain a sales tax permit. Then that business can apply for the proper sales tax exemption forms, including resale certificates.
Most states accept out-of-state resale certificates, but not all. It’s important to make sure you have the right certificate if you’re purchasing items for resale outside of your home state.
Are sellers required to accept resale certificates?
In a word, no. Sales tax obligations are imposed by the state or local tax jurisdiction, not individual retailers.
If anything is out of order with the certificate, the seller is responsible for any uncollected sales tax. For that reason, sellers may choose not to honor resale certificates.
If a buyer pays sales tax on goods for which they’re entitled to an exemption, they can request a refund from the state tax authority.
How long do you need to keep exemption certificates on file?
Purchasers should maintain certificates for as long as they’re valid. In some cases, resale exemptions are issued for individual purchases. In others, they’re valid for several years, or even indefinitely, as long as the information is correct. Changes to a business, such as name, address, and ownership, can void an exemption certificate.
Sellers should hold on to resale certificates until the statute of limitations expires on the purchase, at a minimum. Each state has its own time frame for sales tax assessments. If you’re audited and can’t produce a certificate to justify an exempt sale, you may be responsible for the applicable taxes, as well as potential penalties.
State-by-state rules
Important note: Tax rules change and exceptions are common. The information here is subject to change and offered for informational purposes only. It should not be used as tax advice.
Please consult a sales tax expert who can discuss the details that apply to your business.
Reference
Alabama Department of Revenue FAQ
Accepted resale forms
- Sales tax permit
- Resellers without a sales tax license | Form ST: EX-A1
- MTC Uniform Sales & Use Tax Resale Certificate
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- 6 years if more than 25% of the taxable base is omitted
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Alaska doesn’t have a state sales tax, but local sales tax is permitted and is in effect in multiple jurisdictions.
Sales tax exemptions are also determined by individual municipalities.
Reference
Tax exemption letter of response
Exemption certificate directory
Exempt resellers can use the MTC Uniform Sales & Use Tax Resale Certificate.
Reference
Arizona Department of Revenue TPT exemptions page
Accepted resale forms
Statute of limitations
- 4 years from the due date or filing date, whichever is later
- 6 years if more than 25% of the taxable base is omitted
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- Exemption Certificate | ST-391
- SST Certificate of Exemption
- MTC Uniform Sales & Use Tax Resale Certificate
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- 6 years if more than 25% of the taxable base is omitted
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the end of the month following the quarter being assessed or filing date, whichever is later
- 8 years if more than 25% of the taxable base is omitted
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Accepted exemption forms Statute of limitations
|
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Delaware doesn’t have a state sales tax, or similar. Therefore, an exemption certificate is not applicable.
Reference
Accepted exemption forms
- Annual resale certificate
- MTC Uniform Sales & Use Tax Resale Certificate
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- 6 years if more than 25% of the taxable base is omitted
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
General excise and use tax information
Accepted exemption forms
- Resale Certificate General Form 1
- Resale Certificate General Form 2
- Resale Certificate Special Form
- MTC Uniform Sales & Use Tax Resale Certificate
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- Sales tax resale or exemption certificate | Form ST-101
- MTC Uniform Sales & Use Tax Resale Certificate
Statute of limitations
- The most recent 3 years of business
- The most recent 7 years of business if you don’t have a permit or haven’t filed regularly
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- General sales tax exemption certificate | Form ST-105
- Dealer-to-dealer resale certificate | Form ST-105D
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- Iowa tax exemption certificate | Form 31-014
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- 6 years if return does not include items of gross income as defined in the Internal Revenue Code as amended
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- Resale exemption certificate | Form ST-28A
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 3 years from the filing date
- 6 years if return does not include items of gross income as defined in the Internal Revenue Code as amended
- 2 years from the discovery of the fraud, if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- Resale certificate | Form 51A105
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 4 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- 6 years if tax reported is less than 50% of the tax due
- No statute of limitations if a return is not filed, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date
- No statute of limitations if a return is not filed, is underpaid by 25% or more, or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date
- 6 years if there is a massive underpayment or if returns are filed late
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- Sales tax resale and exemption certificate | Form 3372
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 4 years from the due date or filing date, whichever is later
- 6 years if return does not include items of gross income as defined in the Internal Revenue Code as amended
- 2 years from the discovery of the fraud, if a fraudulent return is filed with intent to evade taxes
Reference
Retailers and wholesalers industry guide
Accepted exemption forms
- Exemption certificate | Form ST3
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 3.5 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Mississippi does not issue resale exemption certificates. Goods for resale can be purchased tax exempt using a valid sales tax permit.
Statute of limitations
- 3.5 years from the due date or filing date, whichever is later
- 6.5 years if underpaid by more than 25%
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Exemption information search hub
Accepted exemption forms
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Montana doesn’t have a state sales tax, or similar. Therefore, an exemption certificate is not applicable.
Reference
Accepted exemption forms
- Resale or exempt sale certificate | Form 13
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 3 years after the last day of the month following the determination period or after the return is filed, whichever is later
- 8 years if there’s an underpayment or no return is filedNo statute of limitations if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years after the last day of the month following the determination period or after the return is filed, whichever is later
- 8 years if no return is filed, a fraudulent return is filed with intent to evade taxes, or there’s an underpayment of more than 25%
New Hampshire doesn’t have a state sales tax, or similar. Therefore, an exemption certificate is not applicable.
Reference
Sales tax exemption administration bulletin
Accepted exemption forms
- Resale certificate | Form ST-3
- Resale certificate for out-of-state sellers | Form ST-3NR
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 4 years from the filing date
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Non-taxable transaction certificates (NTTCs)
Accepted exemption forms
- Non-taxable transaction certificate | Type 2
- Resale certificate | Type 5
- Border states resale certificate
- Out-of-state resale certificate | Type NTTC-OSB
- MTC Uniform Sales & Use Tax Resale Certificate
Statute of limitations
- 3 years from the end of the year in which filing was due
- 6 years if there’s an underpayment of more than 25%
- 7 years if a return is not filed
- 10 years if a fraudulent return is filed with intent to evade taxes
Reference
Exemption certificate information
Accepted exemption forms
Statute of limitations
- 3 years from the filing date
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- Resale certificate | Form SFN 21950 (11-2002)
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- 6 years if a return is not filed or is underpaid by more than 25%
- No statute of limitations if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
- Single purchase exemption | Form STEC U
- Exemption certificate | Form STEC B
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 4 years from the due date or filing date, whichever is later
- No statute of limitations if a return is not filed
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the filing date
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Oregon doesn’t have a state sales tax, or similar. Therefore, an exemption certificate is not applicable.
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the filing date or end of the year in which taxes are due
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Sales tax information (translation available)
Reseller information (translation available)
Accepted exemption forms
Statute of limitations
4 years from the filing date or end of the year in which taxes are due, whichever is later
Reference
Information for exempt organizations
Accepted exemption forms
Statute of limitations
- 4 years from the filing date or the 15th day of the month after the month for which taxes are due, whichever is later
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the due date or filing date, whichever is later
- No statute of limitations if no return is filed, a fraudulent return is filed with intent to evade taxes, or there’s an underpayment of more than 20%
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the filing date
- No statute of limitations if a return is not filed, if a fraudulent return is filed with intent to evade taxes, or if there is an underpayment of the return.
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the end of the year in which filing was due
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 4 years from the due date or filing date, whichever is later
- No statute of limitations if no return is filed, a fraudulent return is filed with intent to evade taxes, or there’s an underpayment of more than 25%
Reference
Accepted exemption forms
- Exemption certificate | Form TC-721
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 3 years from the filing date
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Exemption certificate information
Accepted exemption forms
- Resale and exempt organizations | Form S-3
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 3 years from the filing date
- No statute of limitations if no return is filed, a fraudulent return is filed with intent to evade taxes, or there’s an underpayment of more than 20%
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the filing date
- 6 years if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Reseller guides for qualified industries
Accepted exemption forms
Statute of limitations
- 4 years from the end of the year in which filing was due
- No statute of limitations if a business is not registered or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 4 years from the filing date
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
- 3 years from the filing date
- 6 years if a listed transaction is not disclosed
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Publication 201, Part 11: What is Exempt?
Accepted exemption forms
- Exemption and resale certificate | Form S-211
- Electronic exemption and resale certificate | Form S-211E
- MTC Uniform Sales & Use Tax Resale Certificate
- SST Certificate of Exemption
Statute of limitations
- 4 years from the last day of the year in which the return was filed
- No statute of limitations if a return is not filed or if a fraudulent return is filed with intent to evade taxes
Reference
Accepted exemption forms
Statute of limitations
3 years following the delinquency
Managing resale exemption documents for your business
Managing exemption certificates can be challenging on both sides of the register. Not having the right documents can mean paying taxes you should owe — or owing taxes you should have paid.
Automation can help you keep track of requirements and renewals. Storing documents in the cloud is an efficient way to supply or retrieve certificates, and to find and access the forms you need in the event of an audit.
Avalara has tax compliance solutions to make the process easier for both buyers and sellers of tax-exempt purchases:
- Avalara Exemption Certificate Management can help businesses large or small with collecting, validating, storing, and accessing exemption and resale certificates.
- Avalara Vendor Exemption Management can help you obtain and supply the right documents to support your exemption requests.
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