Reseller Permits
Effective January 1, 2010, the resale certificate will be replaced with a reseller permit issued by the Department of Revenue (Senate Bill 6173). Reseller permits are free and will be issued to businesses that make wholesale purchases, including qualified contractors. The permits allow businesses to purchase items or services for resale without paying retail sales tax. For further information refer to our information on Reseller Permits.
Resale Certificates
What is it?
A resale certificate is a separate piece of paper or card given by a buyer to a seller of tangible personal property which says the goods:
- Are for resale in the regular course of business, without intervening use; or
- Will become a component of goods being resold in the regular course of business; or
- Are chemicals used in processing an article produced for sale.
- For use as feed, seed, seedlings, fertilizer, or spray materials in its capacity as a farmer
What is on a resale certificate?
The resale certificate states the buyer's:
- Name
- Address
- Type of business
- Tax Registration/UBl number (if required to be registered in Washington)
- Type of goods purchased
- Effective date
- Signature of the authorized buyer
- A statement about being responsible for the purchase and understanding the 50% penalty for misuse
- Name of the seller
Single use and blanket certificates
There are two types of resale certificates. The first is a one-time use certificate and must be given to the seller at the time of purchase. It is good for that purchase only. The second is a blanket resale certificate which may be given to a business which the buyer regularly purchases from. This certificate is valid for as long as the buyer and seller have a recurring business relationship. A “recurring business relationship” means at least one sale transaction in a continuous twelve month period
Where do you get one?
Resale certificates (pdf) may be downloaded or purchased at a business stationery shop.
If no certificate
The seller must receive a resale certificate for goods purchased for the reasons listed above or charge retail sales tax on the purchase.
When received
The resale certificate must be received at the time of sale. Certificates received after the sale may not be accepted during an audit.
Are faxed certificates acceptable?
A seller may accept a facsimile copy of a resale certificate, but should get an original as soon as possible.
Tax Registration/UBI number on invoice
The tax registration/UBI number on an invoice is not sufficient. The seller must receive a signed certificate.
Update/how long to keep
Blanket resale certificates are valid for as long as the buyer and seller have a recurring business relationship. A “recurring business relationship” means at least one sale transaction in a twelve month period.
Possible reclassification of sale
During an audit, failure to have a valid, current resale certificate on file may result in the reclassification of the sale from Wholesaling to Retailing B&O tax by the auditor. This will cause the business to owe the retail sales tax for that sale.
References
Washington Administrative Code (WAC) 458-20-102
Excise Tax Advisory (ETA) 3005.2009 (pdf)
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