If you run an online store in the US and sell to customers across different states, you may have encountered the term “sales tax exemption certificate.” But what is it and how does it work?

In this blog post, we will explain how sales and use tax exemption certificates work, who can use them, and what types of exemptions are available. We will also give you some tips on how to manage and verify your exemption certificates.

What is a sales tax exemption certificate

A sales tax exemption certificate is a document that allows you or your customers to buy certain products or services without paying sales tax. This can save you money and reduce your tax liability.

However, not every purchase is eligible for a sales tax exemption. There are specific rules and requirements that you need to follow to use or accept a sales tax exemption certificate. Otherwise, you may face penalties or audits from the tax authorities. 

Read What is Sales Tax Compliance [Tips, Issues & Requirements to Know]

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In a nutshell, this certificate serves as proof of your organization’s tax-exempt status and is typically required when making tax-exempt purchases.

There are different types of sales tax exemption certificates, depending on the purpose and nature of the purchase. Some of the most common types are:

Types of sales tax exemption certificates

1. Resale certificate 

This is used when you buy products or services that you intend to resell to your customers.

For example, if you are a retailer who buys inventory from a wholesaler, you can use a resale certificate to avoid paying sales tax on your purchases. You will then collect and remit sales tax from your customers when you sell the products to them.

2. Wholesale certificate

This is similar to a resale certificate, but it is used when you sell products or services to other businesses who will resell them to their customers.

For example, if you are a wholesaler who sells products to retailers, you can use a wholesale certificate to avoid paying sales tax on your sales. The retailers will then collect and remit sales tax from their customers when they sell the products to them.

3. Manufacturing certificate

This is used when you buy raw materials or components that you will use to manufacture or produce a finished product.

For example, if you are a manufacturer who buys metal, wood, or plastic to make furniture, you can use a manufacturing certificate to avoid paying sales tax on your purchases. You will then collect and remit sales tax from your customers when you sell the finished products to them.

How sales and use tax exemption certificates work

A sales tax exemption certificate is a document that proves that you or your customer are eligible to buy certain products or services without paying sales tax. The certificate contains information such as the name and address of the buyer, the seller, the type of exemption, and the expiration date.

A use tax exemption certificate is similar to a sales tax exemption certificate, but it applies to purchases made from out-of-state sellers. Use tax is a tax that you pay when you buy something from another state and use it in your own state.

For example, if you buy a computer from an online retailer in California and use it in your business in New York, you may owe use tax to New York.

To use or accept a sales or use tax exemption certificate, you need to follow these steps:

Step by step process required to  use or accept a sales or use tax exemption certificate

• Check the rules and requirements of your state and the state where you are buying or selling. Different states have different types of exemptions and different forms of certificates. You can find more information on each state’s website or use a state guide to exemption certificates.
• Fill out the appropriate certificate form and provide it to the seller before or at the time of purchase. You can usually download the form from the state’s website or use a blanket certificate that covers multiple purchases from the same seller. Make sure you fill out the certificate accurately and completely, and sign and date it.
• Keep a copy of the certificate for your records. You may need to show it to the tax authorities if they audit you or ask for proof of exemption. You should also keep track of the expiration date of the certificate and renew it if necessary.
• If you are the seller, verify the validity of the certificate before accepting it. You can do this by checking the information on the certificate, contacting the buyer or the state, or using a verification service that can validate certificates electronically. You should also keep a copy of the certificate for your records and report the exempt sales on your tax returns.

Who qualifies for a sales tax exemption certificate?.

The eligibility for a sales tax exemption depends on the type of buyer, the type of seller, the type of product or service, and the state where the transaction takes place. Some of the common types of buyers who may qualify for a sales tax exemption are:

1. Resellers: If you buy products or services for the purpose of reselling them to your customers, you may be exempt from paying sales tax on your purchases. You will need to provide a resale certificate to your supplier to prove that you are a reseller. You will also need to collect and remit sales tax from your customers when you sell the products or services to them.
2. Nonprofit organizations: If you are a nonprofit organization that is recognized by the IRS under Section 501, you may be exempt from paying sales tax on your purchases. You will need to provide an entity exemption certificate to your supplier to prove that you are a nonprofit organization. You will also need to meet the criteria and follow the rules of each state where you make purchases or sales.
3. Government entities: If you are a federal, state, or local government entity, you may be exempt from paying sales tax on your purchases. You will need to provide a government exemption certificate to your supplier to prove that you are a government entity. You will also need to meet the criteria and follow the rules of each state where you make purchases or sales.

These are some of the most common types of buyers who may qualify for a sales tax exemption, but there may be other types of buyers or situations that are exempt from sales tax depending on the state. For example, some states may exempt certain types of products or services, such as food, clothing, medical supplies, or educational materials. Some states may also exempt certain types of sellers, such as farmers, manufacturers, or contractors.

How to apply and obtain a sales tax exemption certificate

If you or your customers qualify for a sales tax exemption, you will need to apply for and obtain a sales tax exemption certificate from the state where you make purchases or sales. The process and the documents may vary by state, but here are some general steps that you can follow:

Register for a sales tax permit

Before you can apply for a sales tax exemption certificate, you may need to register for a sales tax permit in the state where you make purchases or sales. A sales tax permit is a document that allows you to collect and remit sales tax from your customers. 

You can apply for a sales tax permit online or by mail through the state’s tax department. You may need to provide information such as your business name, address, contact details, type of business, and estimated sales volume. You may also need to pay a registration fee or a bond depending on the state.

Apply for a sales tax exemption certificate

After you register for a sales tax permit, you can apply for a sales tax exemption certificate in the state where you make purchases or sales. A sales tax exemption certificate is a document that allows you to buy certain products or services without paying sales tax. You can apply for a sales tax exemption certificate online or by mail through the state’s tax department. 

You may need to provide information such as your sales tax permit number, the type of exemption, the reason for the exemption, and the expiration date of the certificate. You may also need to provide supporting documents such as a copy of your IRS determination letter, a copy of your articles of incorporation, or a copy of your resale certificate from another state.

Provide the sales tax exemption certificate to your supplier

Once you obtain a sales tax exemption certificate, you can provide it to your supplier when you make purchases or sales. You can provide the certificate in paper or electronic form, depending on the state and the supplier. 

You need to provide the certificate before or at the time of the purchase or sale; otherwise, you may have to pay sales tax and request a refund later. You also need to make sure that the certificate is accurate, complete, and valid; otherwise, you may face penalties or audits from the state.

Read How Sales Tax for Businesses Work in the US

Why do ecommerce businesses need sales tax exemption certificates?

Sales tax exemption certificates can benefit your ecommerce business in several ways, such as:

• Saving money: By using sales tax exemption certificates, you can avoid paying sales tax on your purchases or sales that are exempt from tax. This can save you money and increase your profit margin.
  
  For example, if you buy products from a wholesaler in another state for the purpose of reselling them to your customers, you can use a resale certificate to avoid paying sales tax on your purchases. You will only need to collect and remit sales tax from your customers when you sell the products to them.
  
• Avoiding double taxation: By using sales tax exemption certificates, you can avoid paying sales tax twice on the same products or services. This can prevent double taxation and reduce your tax burden.
  
  For example, if you buy products from a supplier in another state and pay sales tax on your purchases, you can use a sales tax paid certificate to avoid paying sales tax again when you sell the products to your customers in the same state.
  
• Satisfying your customers: By using sales tax exemption certificates, you can satisfy your customers who are eligible for sales tax exemptions. This can improve your customer service and loyalty.
  
  For example, if you sell products or services to nonprofit organizations, government entities, or resellers who are exempt from sales tax, you can accept their exemption certificates and not charge them sales tax on their purchases. This can make your customers happy and encourage them to buy from you again.

When do sales tax exemption certificates expire?

Sales tax exemption certificates are valid for a certain period of time, depending on the type of certificate and the state where it was issued.

Some sales tax exemption certificates do not expire, as long as the information on the certificate is accurate and up to date. Other sales tax exemption certificates expire after a specific date or after a set amount of time has passed.

The expiration date of your sales tax exemption certificate will depend on the state where you make purchases or sales. Some states, like California and Kentucky, have different expiration dates for different types of exemptions, such as resale, nonprofit, or government. Other states, like Florida and New York, have a uniform expiration date for all types of exemptions, such as four years or three years.

To find out when your sales tax exemption certificate expires, you will need to check the certificate itself or the state’s tax department’s website. You can also use a state guide to exemption certificates to find more information.

If your sales tax exemption certificate expires, you will need to renew it or obtain a new one from the state where you make purchases or sales. You will also need to provide the updated certificate to your supplier to continue making tax-free purchases or sales. If you fail to renew or update your exemption certificate, you may have to pay sales tax on your purchases or sales or face penalties or audits from the state.

Common duration period for sales tax exemption certificates validity 

As you can see from the previous section, there is no uniform duration period for the validity of sales tax exemption certificates. However, some common duration periods that you may encounter are:

• One year: This is a common duration period for wholesale certificates and some resale certificates. For example, California, Florida, and Georgia have this duration for their wholesale certificates
• Three years: This is a common duration period for manufacturing certificates and some resale certificates. For example, New York and Pennsylvania have this duration for their manufacturing certificates.
• Four years: This is a common duration period for manufacturing certificates and some resale certificates. For example, Texas and Utah have this duration for their manufacturing certificates. 
• Five years: This is a common duration period for manufacturing certificates and some resale certificates. For example, Illinois and Ohio have this duration for their manufacturing certificates.

Read How to Figure Out Sales Tax (Complete Guide for Beginners)

How to verify the validity of a sales tax exemption certificate

Not every certificate is valid or current. You need to verify the validity of a sales tax exemption certificate before accepting it from your customer or providing it to your supplier. Otherwise, you may face penalties or audits from the tax authorities.

There are different ways to verify the validity of a sales tax exemption certificate, depending on the state where you make purchases or sales. Some of the common methods are:

1. Checking the information on the certificate: You should check that the information on the certificate is accurate and complete, such as the name and address of the buyer and seller, the type and reason for the exemption, the date and signature, and the expiration date. You should also check that the certificate matches the type of product or service that you are selling or buying and that the certificate is appropriate for the state where the transaction takes place.
2. Contacting the buyer or the state: You can contact the buyer or the state tax department to confirm the validity of the certificate. You can ask the buyer to provide additional proof of their exemption status, such as a copy of their IRS determination letter, a copy of their articles of incorporation, or a copy of their resale certificate from another state. You can also call or visit the state tax department website to verify the tax registration number or the exemption number of the buyer.
3. Using a verification service: You can use a verification service that can validate certificates electronically. There are online tools that can help you verify the validity of a sales tax exemption certificate in multiple states, such as EXEMPTAX, Sales Tax 24/7, or Anrok. These tools can save you time and reduce your risk of errors or fraud.

How to renew sales tax exemption certificates (step by step process)

A sales tax exemption certificate is not valid forever. It may expire after a certain period of time or after a certain event. Thus, you need to renew your sales tax exemption certificate before it expires to continue making tax-free purchases or sales.

The process for renewing a sales tax exemption certificate may vary by state, by type of exemption, and by type of buyer. However, here are some general steps that you can follow:

1. Create an inventory of the certificates. The inventory should include information such as the state, the certificate number, the expiration date or validity period, the exemption category, and the contact information of the issuer and the holder. The inventory should be updated regularly and reviewed periodically to identify the certificates that need to be renewed or updated.
   
2. Research the state’s renewal requirements and procedures. The requirements and procedures may differ by state, exemption category, and type of certificate. Some states may have online resources or tools that can help with the renewal process, such as websites, portals, forms, or guides. Some states may also offer email or phone reminders or notifications of the renewal deadlines or status.
   
3. Prepare the renewal application and supporting documents. The application and documents may vary by state, but generally include the same information and proof of eligibility as the initial issuance. The application and documents should be accurate, complete, and consistent with the current business and exemption status. The application and documents should also be submitted before the expiration date or deadline to avoid lapses in validity or penalties.
   
4. Receive and store the renewed certificate. The renewed certificate may be issued in paper or electronic form, depending on the state and the preference of the applicant. The renewed certificate should be checked for accuracy and completeness and stored in a secure and accessible place. The renewed certificate should also be updated in the inventory and presented to the seller whenever making an exempt purchase.

How long does it take to renew sales tax exemption certificates

The time it takes to renew a sales tax exemption certificate may depend on the state where you make purchases or sales, the type of exemption, and the type of buyer. The total time it takes to renew a sales tax exemption certificate may vary from a few days to a few months, depending on various factors. Therefore, it is advisable to start the renewal process as early as possible to avoid any delays or disruptions in your tax-free purchases or sales.

Read How to Calculate Sales Tax Rate

How long does it take to apply for a new sales tax exemption certificate

It may take anywhere from a few minutes to a few weeks to apply for a new sales tax exemption certificate, depending on the method and the state. Applying online may be faster and easier than applying by mail. Some states may process your application immediately, while others may take several days or weeks to review and approve your application.

How long does it take to receive a new sales tax exemption certificate

It may take anywhere from a few days to a few months to receive a new sales tax exemption certificate, depending on the method and the state. Receiving an electronic certificate may be quicker and more convenient than receiving a paper certificate. Some states may send you a new certificate right away, while others may take longer to issue and mail your certificate..

How often do sales tax exemption certificates expire

The frequency of sales tax exemption certificate expiration depends on the state where you make purchases or sales, the type of exemption, and the type of buyer. Some sales tax exemption certificates do not expire, as long as the information on the certificate is accurate and up to date. Some certificates expire after a specific date or after a set amount of time has passed. Some certificates expire after a change in the buyer’s status or the seller’s business.

For example, in some states, like California and Kentucky, certificates expire after four years from the date of issuance. Other states, like Florida and New York, have different expiration dates for different types of businesses.

For example, Florida’s certificates for manufacturers and processors expire after three years, while certificates for retailers expire after five years Some states, like Massachusetts, require certificates to be renewed every five years or whenever there is a change in the buyer’s name, address, or tax identification number.

How to keep track of exemption certificates

There are different ways to keep track of your exemption certificates, depending on your preferences and resources. Some of the common methods are:

• Using a spreadsheet or a database: You can use a spreadsheet or a database program to record and organize your exemption certificates. You can include information such as the buyer’s name, address, and tax identification number; the seller’s name and address; the type and reason for the exemption; the date and signature; and the expiration date. You can also attach a scanned copy or a photo of the certificate to the record. You can use filters, formulas, or alerts to sort, search, or update your certificates. However, this method can be time-consuming, error-prone, and vulnerable to data loss or theft.
• Using a filing cabinet or a binder: You can use a filing cabinet or a binder to store and organize your paper exemption certificates. You can label and arrange your certificates by state, by buyer, by type, or by expiration date. You can also use a calendar or a reminder system to keep track of the renewal dates. However, this method can be cumbersome, inefficient, and risky. You may have difficulty finding or accessing your certificates, or you may damage or lose them due to fire, flood, or theft.
• Using a verification service or a software solution: You can use a verification service or a software solution to automate and simplify your exemption certificate management. There are online tools that can help you verify, store, manage, and renew your exemption certificates in multiple states, such as EXEMPTAX, Sales Tax 24/7, or Anrok. These tools can save you time and reduce your risk of errors or fraud

What are some common mistakes to avoid when using exemption certificates?

Using exemption certificates can be tricky and confusing. You need to avoid some common mistakes that can invalidate your exemption certificates or cause you trouble with the tax authorities. Some of the common mistakes are:

1. Missing or wrong information: You need to make sure that the information on the exemption certificate is accurate and complete, such as the name and address of the buyer and seller, the type and reason for the exemption, the date and signature, and the expiration date. You also need to make sure that the certificate matches the type of product or service that you are selling or buying and that the certificate is appropriate for the state where the transaction takes place.
2. Missing or wrong certificate: You need to make sure that you have the correct and valid certificate for your transaction. You cannot use a document that is not recognized by the state tax authorities, such as a business license, a letter, or an email. You also cannot use a certificate that is not accepted by the state where you are selling or buying, such as a certificate from another state or a certificate for a different type of exemption.
3. Missing or late renewal: You need to make sure that you renew your exemption certificate before it expires. You cannot use an expired or outdated certificate for your transaction. You also need to provide the updated certificate to your supplier or customer as soon as possible. If you fail to renew or update your exemption certificate, you may have to pay sales tax on your purchases or sales or face penalties or audits from the state

Read The Sales Tax Exemption (The Dos & Don’ts)

What are the penalties for operating with an expired sales tax exemption certificate?

If you operate with an expired sales tax exemption certificate, you may face serious consequences from the tax authorities. Depending on the state and the situation, you may be liable for:

1. Paying the sales tax plus interest: If you use an expired exemption certificate to make a tax-free purchase, you may have to pay the sales tax that you should have paid at the time of the purchase, plus interest. The interest rate may vary by state, but it is usually higher than the market rate. For example, in New York, the interest rate for late payment of sales tax is 14.5% per year.
   
2. Paying penalties: If you use an expired exemption certificate to make a tax-free purchase, you may also have to pay penalties for underpayment or fraud. The penalty rate may vary by state, but it is usually a percentage of the tax due.
   
   For example, in California, the penalty for negligence or intentional disregard of the law is 10% of the tax due. The penalty for fraud or intent to evade the tax is 25% of the tax due.
   
3. Facing audits: If you use an expired exemption certificate to make a tax-free purchase, you may trigger an audit by the state tax department. An audit is a process where the tax authorities examine your records and transactions to verify your tax compliance. An audit can be time-consuming, stressful, and costly.
   
   You may have to provide additional documents, answer questions, and cooperate with the auditors. If the audit finds any errors or discrepancies, you may have to pay additional taxes, interest, and penalties.
   
4. Facing legal action: If you use an expired exemption certificate to make a tax-free purchase, you may also face legal action from the state tax department. Legal actions are more severe than audits and can result in criminal charges, fines, or imprisonment. Legal actions are usually reserved for cases of tax evasion or fraud, where there is evidence of willful or deliberate violation of the tax laws.
   
   For example, in Texas, a person who knowingly or intentionally uses a false or fraudulent exemption certificate to evade the tax is guilty of a felony and can be fined up to $10,000, imprisoned for up to five years, or both

What are some common types of supporting documents for exemption certificates?

A sales tax exemption certificate is not enough to validate your exemption. You may also need to provide supporting documents to prove your exemption status or the reason for the exemption.

Some of the common types of supporting documents are:

1. IRS determination letter: This is a letter from the Internal Revenue Service (IRS) that recognizes your organization as a tax-exempt entity under Section 501© of the Internal Revenue Code. Many states require you to provide a copy of your IRS determination letter to prove that you are a nonprofit organization that qualifies for a sales tax exemption. For example, in Illinois, you need to provide a copy of your IRS determination letter along with your entity exemption certificate.
   
2. Articles of incorporation: These are the documents that establish your organization as a legal entity. They usually contain information such as your organization’s name, purpose, structure, and governance. Some states require you to provide a copy of your articles of incorporation to prove that you are a nonprofit organization that qualifies for a sales tax exemption. For example, in Pennsylvania, you need to provide a copy of your articles of incorporation along with your exemption certificate.
   
3. Resale certificate from another state: This is a document that proves that you are a reseller in another state and that you are exempt from paying sales tax on your purchases for resale. Some states require you to provide a copy of your resale certificate from another state to prove that you are a reseller that qualifies for a sales tax exemption. For example, in Florida, you need to provide a copy of your resale certificate from another state along with your annual resale certificate.
   
4. Manufacturer’s certificate: This is a document that proves that you are a manufacturer and that you are exempt from paying sales tax on your purchases of machinery, equipment, or materials used in manufacturing. Some states require you to provide a manufacturer’s certificate to prove that you are a manufacturer that qualifies for a sales tax exemption. For example, in Georgia, you need to provide a manufacturer’s certificate along with your sales and use tax certificate of exemption.

What causes the expiration of a sales tax exemption certificates

As mentioned above, there are various conditions or changes that may lead to the expiration of sales tax exemption certificates. Some of the most common ones are:

• The expiration date: If the sales tax exemption certificate has a specific expiration date, it will expire on that date unless it is renewed or reissued. For example, if a wholesale certificate expires after 12 months, it will expire 12 months after the date of issuance or acceptance.
• The renewal requirement: If the sales tax exemption certificate has a periodic renewal requirement, it will expire after the renewal period unless it is renewed or reissued. For example, if a resale certificate has to be renewed annually, it will expire one year after the date of issuance or acceptance.
• The change in business information: If there is a change in the business information of the issuer or the recipient, the sales tax exemption certificate may expire unless it is updated or reissued. For example, if the issuer or the recipient changes their name, address, or tax identification number, the sales tax exemption certificate may expire.
• The change in tax laws: If there is a change in the tax laws or regulations that affects the validity or applicability of the sales tax exemption certificate, the certificate may expire unless it is updated or reissued. For example, if the state or country introduces a new tax rate, a new tax category, or a new exemption rule, the sales tax exemption certificate may expire.

Tips to avoid lapses and manage sales tax exemption certificates

Managing sales tax exemption certificates can be a complex and challenging task, especially for businesses that operate in multiple states or have a large number of certificates. However, it is a crucial and beneficial task that can help reduce the tax burden and avoid liability. 

Here are some tips that can help improve the management and efficiency of the certificates:

1. Monitor the expiration dates or validity periods of the certificates. The expiration dates or validity periods may vary by state, exemption category, and type of certificate. Both the buyer and the seller should keep track of the expiration dates or validity periods of the certificates and should renew or update the certificates before they expire or become invalid.
2. Notify the seller of any changes in the business or the exemption status. Any changes in the business or the exemption status, such as the name, address, identification number, ownership, activity, or exemption category, may affect the validity of the certificate. The buyer should notify the seller of any changes in the business or the exemption status as soon as possible and should provide the seller with a new or updated certificate if needed.
3. Verify the validity of the certificate before accepting it. The seller should verify the validity of the certificate before accepting it, and should not accept an expired or invalid certificate. The seller can verify the validity of the certificate by checking the expiration date or validity period, the information and proof of eligibility, and the state’s online database or verification system, if available.
4. Keep a record of the certificate and the exempt transactions. Both the buyer and the seller should keep a record of the certificate and the exempt transactions and should retain the record for the required period of time, which may vary by state. The record should include a copy of the certificate, the invoice or receipt, and the details of the transaction, such as the date, amount, description, and exemption reason. The record should be organized and accessible, and should be provided to the state or the auditor if requested.
5. Use a centralized and automated system. A centralized and automated system can help store, track, and update the certificates in a single, secure location and can automate the renewal process and the verification of their validity. A centralized and automated system can also help generate reports and alerts that can help monitor the status and compliance of the certificates.
6. Establish and follow a policy and procedure. A policy and procedure can help define the roles and responsibilities of the staff involved in the management of the certificates and can help establish the standards and guidelines for the issuance, renewal, verification, and recordkeeping of the certificates. A policy and procedure can also help ensure consistency and accuracy in the management of the certificates.
7. Educate and train the staff. Educating and training the staff can help increase awareness and understanding of the importance and benefits of the certificates and can improve the skills and knowledge of the staff involved in the management of the certificates. Educating and training the staff can also help prevent errors and mistakes that can lead to invalid or expired certificates.
8. Review and audit the certificates. Reviewing and auditing the certificates can help identify and correct any errors or discrepancies in the certificates, and can help ensure that they are valid and up-to-date. Reviewing and auditing the certificates can also help prepare for and respond to any external audits or inquiries from the state or the seller.

Read How to Manage Sales Tax Rate for Online Business Sellers

Read Sales Tax Audit (Triggers, Penalties, Mistakes, Process, and More)

Sales tax exemption FAQs

Can I use a blanket certificate for all my purchases?

No, you cannot use a blanket certificate for all your purchases. A blanket certificate only applies to the state where it was issued and the type of exemption that it specifies. 

You cannot use a blanket certificate for purchases that are subject to tax in another state or for purchases that do not qualify for the exemption. You also cannot use a blanket certificate for purchases that are made from a different seller or that are of a different type of property.

What is a blaket certificate

A blanket certificate is a type of sales tax exemption certificate that covers multiple purchases of the same general type of property by the same purchaser from the same seller. A blanket certificate allows the purchaser to buy certain products or services without paying sales tax, as long as the purchase meets the criteria and the rules of the exemption.

A blanket certificate usually contains information such as the name and address of the buyer and the seller, the type and reason for the exemption, the description of the property, and the date and signature of the buyer. A blanket certificate may also have an expiration date or a condition for termination.

A blanket certificate is different from a single-use certificate, which only applies to one purchase and cannot be used again. A blanket certificate is also different from a direct pay certificate, which allows the purchaser to pay the sales tax directly to the state instead of the seller.

Can I use a sales tax exemption certificate in all states?

No, you cannot use a sales tax exemption certificate in all states. You cannot use a certificate that is issued by one state to make tax-free purchases in another state.

For example, if you have a resale certificate from California, you can use it to buy products for resale from a supplier in California without paying sales tax. But you cannot use the same certificate to buy products for resale from a supplier in Nevada, as Nevada has a different form and a different tax rate for resale certificates

Can I use an expired certificate for a purchase or sale?

No, you cannot use an expired certificate for a purchase or sale. An expired certificate is a certificate that has passed its expiration date or has been terminated by a change in the buyer’s status or the seller’s business. An expired certificate is no longer valid and cannot be used to make tax-free purchases or sales. 

If you use an expired certificate for a purchase or sale, you may face serious consequences from the tax authorities. You may have to pay the sales tax plus interest, pay penalties, face audits, or face legal action.

Conclusion

Sales tax exemption is a complex and dynamic topic that affects many small businesses that sell goods or services. To ensure sales tax compliance, the business must know if it qualifies for an exemption and has to collect sales tax, etc.

Knowing how sales tax exemption works also requires that the business know how to avoid common pitfalls and mistakes that can result in penalties, interest, audits, assessments, liens, levies, revocation, suspension, or criminal charges.

We hope this blog post has helped you understand the basics of sales tax for small businesses and how to do and pay sales tax. If you have any questions or need any assistance with your sales tax compliance, please feel free to contact us. We are here to help you with your sales tax needs.