Resales Certificate: What It Is, How It Works, and How to Get One

By Adam Smith | Feb 12, 2026

A resales certificate allows businesses to buy products for resale without paying sales tax at the time of purchase. While the concept is simple, the rules can quickly become confusing because each state follows its own approach. Many sellers only become aware of this when a supplier adds sales tax or asks for additional documentation.

If your business involves buying and reselling goods, understanding these rules can help you avoid extra costs and unnecessary delays. This guide explains who needs this document, how it works, and how to obtain it in a clear, straightforward way.

A resale allows a business to purchase items without paying sales tax because the items will be resold to customers who will pay the tax. Resale certificates are obtained by businesses to present to sellers when making a purchase.

Before tax can be exempted, sellers must check these certificates, and they can help themselves to an easy future reference by documenting the certificate in case the business is audited, and also to show that they proved the tax exemption.

With dropshipping, resale certificates and sales tax become more complicated. It becomes more complicated when a business orders from a dropshipper to send directly to a customer, because it depends on where there is a sales tax nexus or where each party has nexus.

As a buyer, you must obtain resale certificates and present them to your supplier for each purchase. To remove sales tax, suppliers must review and confirm the resale certificates. They keep these certificates on record for future transactions or in case of an audit.

Who bears the sales tax expense when a resale certificate is issued?

Sales tax is a complicated element of dropshipping. A common question is who bears the sales tax expense?

This answer is case dependent; for instance, the location of the supplier and customer, and who has nexus in what states. Proper handling of this situation regulates and avoids unwarranted tax liability.

Who Is Eligible To Use A Resale Certificate?

Resale certificates can only be used for purchasing inventory that will be sold again to customers.
Resale certificates cannot be used for purchases that include business supplies, consumables, or anything that will be used internally in your business.

For example:

Some states allow the same certificate to serve both functions. Other states use different forms for exemption and resale.

Even though both certificates and sales tax permits are related to sales tax, they have a lot of differences.

As you research reseller permit requirements, understand that state laws differ, so some states require that you obtain a sales tax permit before applying for a certificate, while other states allow you to obtain a certificate first, so you will need to look up your state’s laws.

Resale allows your business to make tax-exempt purchases instead of paying sales tax on your business profits.

Here’s how to do it, step by step.

No, a certificate is not valid in other states. Although some states accept multistate forms, other states require multistate forms. A couple of common multistate certificates are:

However, you cannot use outside states in states that don’t accept these forms, and you will need a state resales certificate for your state for tax-exempt purchases.

Each state has its own step, such as obtaining a sales tax permit, and then collecting the relevant state and/or multistate resales certificate forms.

Some states require their own, while others will allow resales certificates from other states. Especially when buying for resale in other states, it is critical to verify that you have the necessary certificates.

No. Legal sales tax regulations are preemptive and not dictated by individual sellers.
Some sellers decide not to take resales certificate because they could be held liable for uncollected taxes.

 This is especially true if the buyer certifies the resales certificate incorrectly. If buyers are charged sales tax on purchases that should have been tax-exempt, they are usually entitled to a refund from the state’s tax authority.

While they are valid, buyers must keep certificates. Some certificates are for one-time purchases, and others are valid for several years, or potentially indefinitely, provided the business information on the certificate doesn’t change. A new name, address, or ownership may also change the validity of a certificate.

Sellers are advised to retain resales certificate at least until the state statute of limitations expires for that particular sale. Each state has different regulations, and exposure to tax liability, tax penalties, and tax audit liability may exist if a seller lacks a certificate after an audit.

Resales certificates are so easy to mishandle. Even a single missing or incorrect document can cost you big time.

Certificate automation is a big help. Certificates are tracked for renewal dates and stored in the cloud. It becomes much easier to provide the certificates, and access is simplified in the event of an audit.

Solutions:

Collect, verify, and store certificates: Keep all exemption and resales certificates organized and accessible.
Request and manage documents from suppliers: Make it simple to provide or obtain the certificates you need.

Using automated solutions can save time, reduce errors, and help you stay compliant with reseller permit requirements across multiple states.

The more information you have available, the smoother your application will be, and the more likely your certificate will be accepted.

In case you do not locate a state on the SST form, the Multistate Tax Commission (MTC) Uniform Sales & Use Tax Exemption can assist.
The MTC form is similar to the SST form, and because of that, it can simplify your tax-exempt purchases for multiple states without the requirement of a different certificate for each state.
For businesses that function in states that are not included in the SST agreement, this is a simple solution.

Here are several guidelines resales certificate holders should remember:

Every vendor is supposed to accept resales certificate, but occasionally, a vendor will choose not to accept one. If you run into this situation, you can do any of the following:

Some states require you to register in-state before applying for a resale certificate. Below is a summary for each state:

Get a business registration in your state along with a sales tax permit.
Complete the state-specific resale certificate form.
Hand this to your supplier when purchasing items for resale.

Adam Smith

Retail research editor at Bin Store Near Me, specializing in Amazon liquidation stores, discount retail outlets, and local bin store locations across US. Verifies store addresses, pricing schedules, and restock days.