If you are a small business owner who sells online to customers in the US or have an e-commerce store and sell to customers in the US, you may need to know about resale certificates. In this blog post, we will explain what a Tennessee resale certificate and license is, how it works, who needs it, why you need it, and how to get one in Tennessee.

What is a Tennessee resale certificate or reseller permit

A Tennessee resale certificate is a document that allows you to buy goods or services from a seller without paying sales tax, if you intend to resell them to your customers.

A resale certificate is also known as:

• Reseller’s permit
• Reseller’s license
• Wholesale’s permit
• Wholesales certficate

This document shows that you can buy the goods tax-free, because you will sell them again and charge sales tax to the final buyer. You can use this document anywhere, as long as the seller agrees. You can also buy any goods with this document, as long as you plan to resell them.

Is Tennessee Seller’s Permit the same as a Tennessee Resale Certificate

No, a Tennessee sales tax permit (also known as a Tennessee seller’s permit) and a Tennessee resale certificate (also known as a reseller’s permit) are not the same thing. A sales tax permit is a license that allows you to collect and remit sales tax from your customers (It can also be called a sales tax registration, a sales tax number, a sales tax ID, or sales tax license.) while a resale certificate is a document that allows you to buy goods or services for resale without paying sales tax.

You need both a sales tax permit and a resale certificate to operate a business in Tennessee.

How does a tennessee resale certificate work

A Tennessee resale certificate exempts you from paying sales tax on purchases you intend to resell. You’ll collect and remit the sales tax when you sell those items to your customers. Think of it like a delay – you don’t pay upfront, but your customers do at the point of sale.

Who needs a Tennessee resale certificate

In Tennessee, a resale certificate isn’t mandatory. But, if you run an online business and resell products, you’ll need one to avoid paying sales tax on your inventory purchases. This saves you money upfront!

What information is on a Tennessee Resale Certificate

A Tennessee resale certificate typically includes your business name and address, Tennessee sales tax permit number, and a signature of an authorized representative

Here’s a detailed breakdown of what you will find in a Tennessee resale certificate

• Your Business Information: This includes your business name, address, and Tennessee Sales Tax Registration number.
• Resale Certificate Type: It may specify “Blanket Certificate” for ongoing tax-exempt purchases or a “Single Purchase Certificate” for a specific transaction.
• Effective Date & Expiration (if applicable): Blanket certificates generally remain valid until revoked, while single-purchase certificates may have a limited validity period.
• Buyer’s Signature: Your authorized representative’s signature verifies the certificate’s legitimacy.

What is Tennessee resale certificate number or reseller tax Id

A resale certificate number is a unique identification number that is assigned to you by the state tax authority when you register for a resale certificate. It is also called a sales tax registration number, a sales tax license number, or a sales tax account number. You will need to provide this number to the sellers when you buy goods or services for resale.

Why do you need a certificate of resale in Tennessee

You need a resale certificate to avoid paying sales tax twice on the same goods or services. Sales tax is only supposed to be collected once, at the final point of sale to the end consumer. If you buy goods or services for resale, and you pay sales tax on them, you will have to charge sales tax again when you sell them to your customers. This will result in double taxation, which is unfair and illegal. A resale certificate allows you to buy goods or services for resale without paying sales tax, and then collect and remit sales tax when you sell them to your customers.

How do I get a resale certificate in Tennessee

To obtain a resale certificate from the Tennessee, simply visit the Tennessee Department of Revenue’s website and search for “Resale Certificate,” gather proof of your business (like your license and resale permits), submit the application with those documents and a processing fee, and you’ll receive your electronic certificate within 1-2 business days if approved.

Step 1: Register with the Tennessee Department of Revenue (DOR) as a sales tax vendor. You can do this online, by mail, or in person. You will need to provide some information about your business and pay a one-time registration fee of $15.

Step 2: Receive a resale certificate number and a sales tax account number from the DOR. You will also receive a Tennessee Sales and Use Tax Certificate of Registration, which is a wallet-sized card that shows your numbers. You will need to display this card at your place of business and show it to the sellers when you buy goods or services for resale.

Step 3: Fill out a resale certificate form and give it to the seller when you buy goods or services for resale. You can download the form from the DOR website or get a copy from the seller. The form has two parts: one for the buyer and one for the seller. 

You will need to provide your name, address, resale certificate number, sales tax account number, a description of the goods or services, and a statement that you are buying them for resale. The seller will need to provide their name, address, sales tax account number, the date and amount of the sale, and their signature. The seller will keep a copy of the form for their records, and you will keep a copy for your records.

Step 4: Use the resale certificate only for goods or services that you intend to resell and not for your own use. You will have to collect and remit sales tax when you sell them to your customers. You will also have to file regular sales tax returns and report any purchases that you made with a resale certificate and then use for your own use.

Step 5: Update your resale certificate if any of your business information changes, such as your name, address, phone number, email, type of business, or bank account details. You can update your resale certificate online, by mail, or in person.

Step 6: Verify the validity of a resale certificate that you receive from a buyer, if you are a seller. You can do this online, by phone, or by email. You will need to provide the buyer’s resale certificate number and sales tax account number, and the DOR will confirm if the buyer is registered and in good standing. 

You have to verify a resale certificate within 90 days of the sale or before you file your sales tax return for the period that includes the sale, whichever is earlier. You have to keep a record of the verification for your records.

How long does it take to get a Tennessee resale certificate

It usually takes about two weeks to get a Tennessee resale certificate after you submit your registration application to the DOR. However, it may take longer during peak periods, such as the beginning of the year, or if there are any errors or issues with your application. You can check the status of your application online, by phone, or by email.

How much is a Tennessee resale certificate

A Tennessee resale certificate is free, except for the one-time registration fee of $15 that you have to pay when you register with the DOR. There is no renewal fee or expiration date for a Tennessee resale certificate. However, you have to file regular sales tax returns and pay any sales tax that you collect from your customers.

How to fill out a Tennessee resale certificate

A Tennessee resale certificate is a simple form that you have to fill out and give to the seller when you buy goods or services for resale. You can download the form from the DOR website, or get a copy from the seller. The form has two parts: one for the buyer, and one for the seller.

The buyer’s part of the form requires you to provide the following information:

• Your name and address
• Your resale certificate number and sales tax account number
• A description of the goods or services that you are buying for resale
• A statement that you are buying the goods or services for resale, and not for your own use
• Your signature and date

The seller’s part of the form requires the seller to provide the following information:

• Their name and address
• Their sales tax account number
• The date of the sale
• The amount of the sale
• Their signature

The seller has to keep a copy of the completed form for their records, and the buyer has to keep a copy for their records.

How to use a Tennessee resale certificate

You can use a Tennessee resale certificate to buy goods or services for resale from any seller who is registered to collect sales tax in Tennessee, or from any seller who is located outside of Tennessee, but has nexus (a physical or economic presence) in Tennessee. You cannot use a Tennessee resale certificate to buy goods or services for your own use, or for any purpose other than resale.

You have to present a valid resale certificate to the seller at the time of purchase, or before the seller invoices you. You cannot use a resale certificate after you have paid sales tax on a purchase. You have to use a separate resale certificate for each purchase, unless you have a blanket resale certificate, which is a single certificate that covers multiple purchases from the same seller.

You have to use a Tennessee resale certificate in good faith, and only for goods or services that are related to your business. You cannot use a resale certificate to evade sales tax, or to buy goods or services that are not for resale. If you misuse a resale certificate, you may face penalties, interest, and criminal charges.

How long is a Tennessee resale certificate good for

A Tennessee resale certificate does not have an expiration date, as long as your business is active and registered with the DOR. However, you have to update your resale certificate if any of your business information changes, such as your name, address, phone number, email, type of business, or bank account details. You can update your resale certificate online, by mail, or in person.

How to verify a Tennessee resale certificate

If you are a seller who receives a resale certificate from a buyer, you have to verify that the resale certificate is valid and current. You can do this online, by phone, or by email. You will need to provide the buyer’s resale certificate number and sales tax account number, and the DOR will confirm if the buyer is registered and in good standing.

You have to verify a resale certificate within 90 days of the sale, or before you file your sales tax return for the period that includes the sale, whichever is earlier. You have to keep a record of the verification for your records.

What does a Tennessee resale certificate or form look like

A resale certificate is a simple form that has two parts: one for the buyer, and one for the seller. Here is an example of what a Tennessee resale certificate looks like:

Tennessee Resale Certificate Pdf

Do Tennessee resale certificates expire

No, a Tennessee resale certificate does not have an expiration date, as long as your business is active and registered with the state tax authority. However, you have to update your resale certificate if any of your business information changes, such as your name, address, phone number, email, type of business, or bank account details. You can update your resale certificate online, by mail, or in person.

Does Tennessee accept out-of-state resale certificates

Yes, Tennessee accepts resale certificates from other states, as long as they are valid and current. However, you have to make sure that the goods or services that you are buying for resale are taxable in Tennessee, and that the seller is registered to collect sales tax in Tennessee. You also have to provide the seller with your Tennessee sales tax account number, in addition to your out-of-state resale certificate number.

Are Tennessee resale certificates good in other states

No, a Tennessee resale certificate is only good in Tennessee. If you want to buy goods or services for resale in other states, you have to obtain a resale certificate from those states, if they require one. You also have to comply with the sales tax laws and regulations of those states, and collect and remit sales tax from your customers accordingly

Do all sellers accept Tennessee resale certificates

No, not all sellers accept Tennessee resale certificates. Some sellers may not be familiar with the resale certificate rules, or may not trust the validity of your resale certificate. Some sellers may also have their own policies or preferences regarding resale certificates. If a seller refuses to accept your resale certificate, you have two options:

• You can pay the sales tax on the purchase, and then file a claim for refund with the state tax authority, along with a copy of your resale certificate and your sales receipt.
• You can find another seller who is willing to accept your resale certificate, and buy the goods or services from them.

Conclusion

A resale certificate is a document that allows you to buy goods or services for resale without paying sales tax. It is a useful tool for small business owners who sell online to customers in the US or have ecommerce stores and sell to customers in the US. To get a resale certificate in Tennessee, you have to register with the DOR, pay a one-time fee of $15, and fill out a simple form. You have to use a resale certificate in good faith and only for goods or services that are for resale. You also have to file regular sales tax returns and pay any sales tax that you collect from your customers.

We hope this blog post has helped you understand how to get a resale certificate in Tennessee. 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.