GlossaryUS
What is a resale certificate?
Sales tax resale (exemption) certificate
Short answer
A resale certificate is a document a business gives its supplier so it can buy goods it will resell without paying sales tax. The seller keeps it as proof of why no tax was collected on that sale.
Explained
It is only for goods that will genuinely be resold; items bought for the business’s own use are not covered. Texas states plainly that a resale certificate should not be used if there is any question whether the item will be resold.
The certificate’s format varies by state and generally relies on the buyer’s sales tax registration. Misuse can carry heavy consequences: states provide for tax, penalties and criminal prosecution.
Good to know
- The buyer completes the certificate and gives it to the seller; the seller does not have to accept it.
- The seller keeps the certificate for the period its state requires.
- Which state’s certificate you need depends on your registration and on the seller you buy from.
Official sources
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This page is general information, not legal or tax advice. Rules change; check the official source for the latest position or talk to us.
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