Wholesalers need a copy of customer's reseller permit
Reseller permits required to make purchases for resale
Resale certificates are no longer valid. Every business that sells at wholesale and has customers' resale certificates on file must now have valid reseller permits or other documentation for those customers.
Verifying reseller permits
The Department has tools to assist you in verifying a reseller permit:
- For a single record, use our Business Lookup. Keep a print copy of the record.
- For multiple records, use our Reseller Permit Verification Service. If you choose to use this service, export the results and save a copy for your records.
Documenting wholesale sales
In case of an audit, a seller must provide documentation to prove that a sale is a wholesale sale rather than a retail sale. That documentation must be kept for five years after it was last used. You have up to 120 days from the date of the sale to collect the documentation.
Documentation options include:
- A paper or electronic copy of the reseller permit.
- A print out of the customer's information on the Business Lookup.
- The verification results you received and saved through the Reseller Permit Verification Service.
Other documents used for tax-exempt purchases
Your customers may also use specific exemption documents to make purchases without paying sales tax. These may include:
- Streamlined Sales Tax exemption certificate (pdf)
- Multi-State Tax exemption certificate
- Farmers' Certificate for Wholesale Purchases and Sales Tax Exemptions (pdf)
The Department routinely examines purchases made with reseller permits to verify they are used appropriately. Sellers are not responsible for uncollected sales tax if they have record of a reseller permit or other valid exemption certificate that supported the sale.
When to collect sales tax
If a buyer does not have a valid reseller permit or exemption certificate, you need to collect sales tax. You may refuse to make a sale without charging tax if you have reason to believe:
- Your customer is not reselling the items.
- The permit is expired or otherwise not valid.
Things to know about reseller permits
Permit numbers: Unique to each business. The last two digits are the year it expires.
Effective dates: Listed in the upper-right corner.
Misuse: Misuse of a permit may result in penalties for the buyer and the permit being revoked.
Reseller permits may be used to buy:
- Merchandise and inventory for resale without the buyer using first.
- Ingredients, components, or chemicals used in processing new products for sale.
- Feed, seed, seedlings, fertilizer, and spray materials if you are a farmer.
- Materials and contract labor for retail/wholesale construction.
- Items for dual purposes.
Reseller permits may NOT be used to buy:
- Items for personal or household use.
- Items used in a business that are not resold, such as office supplies and equipment.
- Promotional items or gifts.
- Tools, equipment, or equipment rentals.
- Materials and contract labor for public road construction or U.S. government contracting.
- Materials and contract labor for speculative building.