If you’re opening a Washington DC business where you plan to purchase goods and sell them to customers, a DC resale certificate can help you get more for less.
What Is a Resale Certificate?
A resale certificate is a legal document that allows business owners to purchase goods—which they will later sell to customers—from suppliers without paying sales tax. This saves the business money, and it protects the supplier by identifying who is and isn’t okay to give the exemption. It may also help DC businesses qualify for wholesale discount pricing.
Resale certificates are closely related to seller’s permits and sales tax permits, and the three are often lumped together. A business does need to have a Washington DC seller’s permit and sales tax permit in order to get a resale certificate, but they’re still technically different.
Other Names for a Resale Certificate
You might hear resale certificates referred to by other names, such as:
- Resale license
- Resale permit
- Wholesale permit
- Sales/use tax certificate
- Tax exemption certificate
- Wholesale license
No matter what name it goes by, the function of the document is still the same. It still grants you the legal permissions your business needs to purchase wholesale goods tax-free and resell them to customers.
Who Needs This Certificate and Why?
Unlike a seller’s permit, which is required by law, a resale certificate isn’t necessarily required to operate a business in Washington DC. However, it’s very easy to get and is absolutely encouraged for any resale business. There’s really no downside to having this certificate; you can still buy and sell without it, but there’s no reason to dismiss the financial benefits.
Any DC area business that purchases and resells physical, tangible goods should have a resale certificate to avoid tax. If you plan to buy from multiple suppliers, you’ll also need to have a resale certificate in place with each one. Always keep physical or digital copies of each one on hand in case you’re ever asked to prove your status.
Examples of businesses who might need a resale certificate include:
- A home goods store that buys decor, linens, etc. from different manufacturers
- A pet store that buys bulk amounts of food from different suppliers
- A pop-up shop that buys District of Columbia souvenirs and shirts to sell to tourists
- An e-commerce thrift store that buys secondhand clothing and resells it online
- An out-of-state business looking to buy from a DC wholesaler
Ultimately, the government and the suppliers want to be sure that the required tax will be paid somewhere along the line. For them, a DC resale certificate is like a promise that the business will charge the customer for that tax when the goods are resold. Without this document, suppliers can’t tell who qualifies and are legally obligated to charge sales tax.
Do Washington DC Resale Certificates Expire?
Expiry dates vary throughout the U.S., and the rules can be quite different. In the District of Columbia, this certification lasts for one year from the date of issue. If you have multiple certificates with several suppliers, make sure you keep track of when each of them needs to be renewed.
How to Get Your Washington DC Resale Certificate with FastFilings
In order to get a DC resale certificate, your business first needs to have a seller’s permit (or business license) and a sales tax ID. If you haven’t already done so, you’ll need to file for a District of Columbia sales tax license. Once you have a District of Columbia business license and tax ID number, you’re ready to get your resale certificate.
Here’s how it works when you file with FastFilings:
- First, provide us with basic contact information and relevant business details via our online form. This should take about five minutes if you’ve got all the information ready.
- When you’re done with the form, submit it along with a small filing fee. Our team will carefully check the information for any mistakes or issues, and then send it to district authorities for processing. We put a rush on all applications, helping you get your documents even faster.
- As soon as your application is approved, we’ll deliver your certificate to you. Sometimes we’re even able to deliver them the same business day!
If you’re planning to buy and sell products in Washington DC, applying for a resale certificate is an excellent way to start your business out on the right foot. Fill out our simple application form to request your certification today, or contact our support team for more information on how to start a Washington DC business.