Q: How can I get a resale certificate?
Thank you to a client from New York for that great question! A New York Resale Certificate (also called a sales tax exemption certificate) is a document that allows businesses to purchase items for resale without paying sales tax. Resale certificates are issued by the NY Department of Revenue and Taxation. Before you can get a resale certificate, you’ll need a NY Sales Tax Certificate of Authority. We’ll explain who can get a resale certificate in New York and how to do it.
Who is eligible for a resale certificate in New York?
People who intend to resell the item they are purchasing in New York are eligible for a resale certificate. For example, if you buy 100 scented candles from a wholesaler with the intention of selling them at your store, you can give the resale certificate to the wholesaler, who can then sell you the candles without charging sales tax. When you then sell a candle to a customer, the customer will pay sales tax on the purchase, which you collect and pay to the Department of Revenue and Taxation.
How can I obtain a New York Resale Certificate?
Getting a resale certificate in New York is a two-step process. First, you need a Sales Tax Certificate of Authority. Then you can get the resale certificate itself. Here’s how you do it.
1. Obtain a New York Sales Tax Certificate of Authority
A Sales Tax Certificate of Authority is a registration with the state of New York allowing a business to collect sales tax on items it’s reselling. You’ll need to apply for your Certificate of Authority online through New York Business Express. Once the Department of Taxation and Revenue approves your application, they will mail you a Certificate of Authority. If you will have multiple business locations, you’ll need to apply for a Certificate of Authority for each location.
You must display your Certificate of Authority at your place of business. If you don’t have a physical business location, you can display it on a truck, car, or cart that you use to conduct business, or even on the wall of your home office.
2. Complete the New York Resale Certificate
Once you’ve received your Certificate of Authority, you’re ready to complete the New York Resale Certificate. When you purchase items for resale, you’ll fill out this certificate and give it to the vendor, who then keeps it with his or her records. You must give this certificate to the vendor within 90 days of making the sale. Here’s the information you’ll need to include on the certificate:
- Seller’s name and address (this is the person you’re purchasing items from)
- Your name and address
- Whether it’s a single-use certificate or blanket certificate (for multiple purchases of items of the same type)
- Business type and what you primarily sell
- Whether you are a permanent New York State vendor or a temporary vendor
- Certificate of Authority number
- Items being purchased
- If an out-of-state vendor, your home jurisdiction and sales tax registration number (if applicable)
- Your signature
Who can’t use the Resale Certificate?
You can’t use a New York Resale Certificate to…
- Avoid paying sales tax on cigarettes or motor fuel.
- Purchase supplies as a contractor. (Contractors use a separate form for tax-exempt purchases: the Contractor Exempt Purchase Certificate.)
- Buy goods or services you don’t intend to resell.
Check out our guide on How to Start a Business in New York.