Out-of-State Resale Certificates: Who Doesn’t Accept Them?

Buying items in bulk for resale is expensive enough without paying sales tax on the purchase. That’s why a resale certificate is commonly used in these transactions—it gives businesses the right to make these kinds of purchases without being required to pay sales tax. But differing state laws can complicate these transactions. 

In some cases, a business that is based in one state cannot carry out a tax-exempt transaction of this nature in another state. Their home state’s resale certificate will not be accepted. This means it will be necessary to find another way to make a tax-exempt transaction, like registering with the state in which they’re trying to make a purchase.

There is 1 district and 11 states that do not accept out-of-state resale certificates. Out-of-state businesses that want to avoid paying sales tax on items for reselling will not be able to use their standard resale certificate when making purchases in these states.

Some states will allow you to make business purchases as long as you are paying sales tax in at least one other state; frequently you will be expected to fill out a special form at the time of the purchase. Requirements also vary by vendor, with some stores like Target declining to accept resale certificates from resellers at all.

Which states do not accept out-of-state resale certificates? This infographic lists the states that require the use of their own tax exemption certificates or registration with an appropriate agency. It also includes instructions on how to obtain the permits you need to expand your purchasing power, get wholesale discounts, and comply with state laws. 

Resale certificate forms can often be downloaded for free from the relevant state government website. If you would like to obtain a seller’s permit, you can use FastFilings’ online service to apply for a valid license in any state.