If you are a small business owner who sells online to customers in the US or have an ecommerce store and sell to customers in the US, you may need to collect and remit sales tax in some states. However, you may also be able to purchase items or services for resale without paying sales tax, if you have a valid resale certificate. In this blog post, we will explain what a resale certificate is, how it works, and how to get one in New York.

What is a New York Resale Certificate or Reseller Permit

A New York resale certificate, also known as a reseller permit, is a document that allows you to buy items or services for resale without paying sales tax to your supplier. It also allows you to sell items or services to your customers without charging sales tax, as long as they provide you with their own resale certificate. A resale certificate is not a license to do business in New York, nor does it exempt you from paying income tax or other taxes.

How Does a New York Resale Certificate Work

A New York resale certificate works as follows:

• You must be a registered New York sales tax vendor or a non-New York purchaser who is not required to be registered in New York to use a resale certificate.
• You must fill out a resale certificate (Form ST-120) and give it to your supplier when you buy items or services for resale. You must also keep a copy of the certificate for your records.
• Your supplier must keep the certificate and not charge you sales tax on the items or services you buy for resale.
• You must sell the items or services you bought for resale in the same form or as a component of other items or services. You cannot use the items or services yourself or for any other purpose that is not for resale.
• You must collect sales tax from your customers when you sell the items or services you bought for resale, unless they provide you with their own resale certificate.
• You must file sales tax returns and remit the sales tax you collect to the New York State Department of Taxation and Finance.

What is New York Resale Certificate Number or Reseller Tax ID

A New York resale certificate number or reseller tax ID is the number that identifies you as a registered New York sales tax vendor or a non-New York purchaser who is not required to be registered in New York. 

You must enter this number on the resale certificate (Form ST-120) that you give to your supplier. If you are a registered New York sales tax vendor, your resale certificate number is the same as your Certificate of Authority number. If you are a non-New York purchaser, your resale certificate number is the sales tax or value added tax (VAT) registration number issued by your home state or jurisdiction.

Is a New York Sales Tax Permit the Same as a New York Resale Certificate

No, a New York sales tax permit and a New York resale certificate are not the same. A New York sales tax permit, also known as a Certificate of Authority, is a document that authorizes you to collect sales tax from your customers and remit it to the New York State Department of Taxation and Finance. 

A New York resale certificate is a document that allows you to buy items or services for resale without paying sales tax to your supplier. You need both a sales tax permit and a resale certificate to do business in New York as a reseller.

New York Seller Permit vs Resale Certificate

A New York seller permit and a New York resale certificate are different terms for the same document, which is Form ST-120. A seller permit is the name used by the New York State Department of Taxation and Finance, while a resale certificate is the name used by the sellers and purchasers. Both terms refer to the document that allows you to buy items or services for resale without paying sales tax to your supplier.

Who Needs a New York Resale Certificate

You need a New York resale certificate if you are:

• A registered New York sales tax vendor who buys items or services for resale in New York or for use in performing taxable services in New York.
• A non-New York purchaser who is not required to be registered as a New York sales tax vendor and who buys items or services for resale that are delivered directly by the seller to your customer or to an unaffiliated fulfillment services provider in New York, or for resale from a business located outside New York.

You do not need a New York resale certificate if you are:

• A registered New York sales tax vendor who buys items or services for your own use or consumption in New York. You must pay sales tax on these purchases.
• A non-New York purchaser who is required to be registered as a New York sales tax vendor and who buys items or services for resale in New York. You must register for a New York sales tax permit and collect and remit sales tax on your sales in New York.

Why Do You Need a Certificate of Resale in New York

You need a certificate of resale in New York to:

• Avoid paying sales tax on items or services that you buy for resale. This reduces your cost of goods sold and increases your profit margin.
• Comply with the New York sales tax laws and regulations. This prevents you from being liable for the sales tax that you should have paid or collected, as well as penalties and interest.

What Information is on a New York Resale Certificate

A New York resale certificate (Form ST-120) contains the following information:

• The name and address of the seller and the purchaser.
• The type of certificate: single-use or blanket. A single-use certificate is valid for one purchase only, while a blanket certificate is valid for multiple purchases of the same type of items or services from the same seller.
• The type of purchase: tangible personal property or service for resale, or restaurant-type food, heated food, or heated drink for resale.
• The type of purchaser: New York State vendor, New York State temporary vendor, or non-New York State purchaser.
• The resale certificate number or reseller tax ID of the purchaser.
• The certification statement that the purchaser is buying the items or services for resale and that the certificate is true, complete, and correct.

How to Get a Resale Certificate in New York (Steps)

To get a resale certificate in New York, you need to follow these steps:

• Register for a New York sales tax permit (Certificate of Authority) if you are required to do so. You can apply online through the New York Business Express website or by filing Form DTF-17, Application to Register for a Sales Tax Certificate of Authority.
• Download Form ST-120, Resale Certificate, from the New York State Department of Taxation and Finance website or obtain a copy from your supplier.
• Fill out the form with the required information and sign it.
• Give the original form to your supplier when you make a purchase for resale, and keep a copy for your records.
• Update or renew your resale certificate as needed.

How Long Does it Take to Get a New York Reseller’s License?

It depends on how you apply for a New York reseller’s license, which is the same as a New York sales tax permit (Certificate of Authority). If you apply online through the New York Business Express website, you can get your reseller’s license immediately after completing the application. If you apply by mail, it may take up to six weeks to process your application and receive your reseller’s license.

How Much Does a New York Reseller Permit Cost

There is no fee to apply for or obtain a New York reseller permit, which is the same as a New York sales tax permit (Certificate of Authority). However, you may have to pay other fees or taxes related to your business, such as income tax, franchise tax, or corporation tax.

How to Fill Out a New York Resale Certificate

To fill out a New York resale certificate (Form ST-120), you need to:

• Enter the name and address of the seller and the purchaser in the spaces provided.
• Mark an X in the appropriate box to indicate the type of certificate: single-use or blanket.
• Mark an X in the appropriate box to indicate the type of purchase: tangible personal property or service for resale, or restaurant-type food, heated food, or heated drink for resale.
• Mark an X in the appropriate box to indicate the type of purchaser: New York State vendor, New York State temporary vendor, or non-New York State purchaser.
• Enter your resale certificate number or reseller tax ID in the space provided. If you are a New York State vendor, this is the same as your Certificate of Authority number. If you are a non-New York State purchaser, this is the sales tax or VAT registration number issued by your home state or jurisdiction.
• Read the certification statement, sign, and date the form.

How to Use a New York Resale Certificate

To use a New York resale certificate (Form ST-120), you need to:

• Give the original form to your supplier when you make a purchase for resale. Do not send the form to the New York State Department of Taxation and Finance.
• Keep a copy of the form for your records for at least three years from the date of purchase.
• Use the items or services you bought for resale in the same form or as a component part of other items or services. Do not use them yourself or for any other purpose that is not for resale.
• Collect sales tax from your customers when you sell the items or services you bought for resale, unless they provide you with their own resale certificate.
• File sales tax returns and remit the sales tax you collected

How Long is a New York Resale Certificate Good For

A New York resale certificate is good for as long as you are in business and making purchases for resale, unless you change your business name, address, or ownership. If you make any of these changes, you must update your resale certificate and give a new one to your supplier.

How to Verify a New York Resale Certificate

If you are a seller who receives a New York resale certificate from a purchaser, you can verify the validity of the certificate by using the New York State Tax Department’s Online Services. You can enter the resale certificate number or reseller tax ID of the purchaser and check if they are registered as a New York sales tax vendor or a non-New York purchaser who is not required to be registered in New York. You can also see the type of items or services that they are authorized to buy for resale.

What Does a New York Resale Certificate or Form Look Like

A New York resale certificate or form (Form ST-120) looks like this:

!New York Resale Certificate

Do New York Resale Certificates Expire

No, New York resale certificates do not expire, unless you change your business name, address, or ownership. However, you should update or renew your resale certificate as needed to reflect any changes in your business or the items or services that you buy for resale.

How Often Do I Need to Renew My New York Resale Certificate

You do not need to renew your New York resale certificate on a regular basis, unless you change your business name, address, or ownership. However, you should review your resale certificate periodically and make sure that it is accurate and complete. You should also give a new resale certificate to your supplier if you start buying different types of items or services for resale.

Does New York Accept Out-of-State Resale Certificates

Yes, New York accepts out-of-state resale certificates from non-New York purchasers who are not required to be registered as New York sales tax vendors and who buy items or services for resale that are delivered directly by the seller to their customer or to an unaffiliated fulfillment services provider in New York, or for resale from a business located outside New York. However, the out-of-state resale certificate must contain the same information as the New York resale certificate (Form ST-120) and must be signed by the purchaser.

Are New York Resale Certificates Good in Other States

No, New York resale certificates are not good in other states. Each state has its own rules and requirements for sales tax and resale certificates. If you buy items or services for resale in another state, you must comply with the sales tax laws and regulations of that state. You may need to register for a sales tax permit and collect and remit sales tax in that state, or obtain a resale certificate from that state and give it to your supplier.

Do All Sellers Accept New York Resale Certificates

No, not all sellers accept New York resale certificates. Some sellers may require additional documentation or verification before they accept your resale certificate and exempt you from sales tax. Some sellers may also charge you sales tax and require you to apply for a refund from the New York State Department of Taxation and Finance. You should always check with your supplier before you make a purchase for resale and make sure that they accept your resale certificate.

Conclusion

A New York resale certificate is a document that allows you to buy items or services for resale without paying sales tax to your supplier. It also allows you to sell items or services to your customers without charging sales tax, as long as they provide you with their own resale certificate. 

To get a resale certificate in New York, you need to register for a New York sales tax permit, fill out a resale certificate form, and give it to your supplier. You also need to keep a copy of the certificate for your records, update or renew it as needed, and file sales tax returns, and remit the sales tax you collected. 

A New York resale certificate is valid for as long as you are in business and making purchases for resale, unless you change your business name, address, or ownership. A New York resale certificate is not valid in other states, and not all sellers accept it. 

You should always verify the validity of the resale certificate and comply with the sales tax laws and regulations of the state where you buy or sell items or services for resale.

We hope this blog post has helped you understand how to get a resale certificate in New York and how to use it properly. If you have any questions or need any assistance, please feel free to contact us. We are here to help you with your sales tax compliance needs