Sales tax
Resale Certificates in 2026: How to Buy Inventory Tax-Free and Accept Certificates Safely
What a resale certificate is in 2026, how to fill in and accept one, state forms (TX 01-339, CA CDTFA-230), multistate SST and MTC forms, and audit-proof records.
Edited by Sumeet YadavFounder & editor, MSMETOOLS · fact-checked against official sources
Contents (11)
- 1. What a resale certificate is and why it exists
- 2. Who can issue a resale certificate
- 3. State resale certificate forms: examples
- 4. Multistate forms: the SST certificate and the MTC certificate
- 5. How to fill in a resale certificate as a buyer
- 6. How sellers accept resale certificates in good faith
- 7. Record-keeping and how long to keep certificates
- 8. Worked examples: what a resale certificate saves and what a missing one costs
- 9. Common mistakes and how to fix them
- 10. Official forms and guidance
- 11. What to do next
If you buy goods to resell them, you shouldn't pay sales tax on that stock. The tax belongs at the end of the chain, when your customer buys. A resale certificate is the document that makes this work. This guide is for retailers, wholesalers, online sellers, dropshippers and the bookkeepers who handle their invoices. It covers who can issue a certificate, the main state forms (Texas 01-339, California CDTFA-230, New York ST-120, Florida's annual certificate), the two multistate forms, how sellers accept certificates safely, how long to keep them, and what an audit costs when a certificate is missing. Rules were checked against state revenue departments in October 2026.
Quick answer
A resale certificate is a signed form a buyer gives a supplier to buy goods tax-free because they will be resold. The buyer needs a sales tax permit first and quotes its number on the form. The supplier keeps the certificate on file. If an auditor finds a tax-free sale with no valid certificate, the supplier owes the tax.
State forms: Texas 01-339, California CDTFA-230, New York ST-120, Florida Annual Resale Certificate
Multistate forms: the Streamlined Sales Tax Certificate of Exemption (24 states) and the MTC Uniform Resale Certificate (38 states, with conditions)
Streamlined states protect a seller that receives a complete certificate within 90 days of the sale
Keep certificates at least as long as the audit period: four years in Texas
If you use resale stock yourself, you owe use tax on it
What a resale certificate is and why it exists
Sales tax is meant to be paid once, by the final consumer. If every wholesaler, distributor and retailer paid tax on the goods it bought to resell, the same product would be taxed several times before it reached a customer. States prevent this with a sale for resale exclusion: a sale to someone who will resell the item is not a retail sale, so no tax is due on it.
The supplier, though, can't simply take the buyer's word for it. In every state with a sales tax, the seller is presumed to owe tax on all its sales unless it can prove otherwise. The resale certificate is that proof. It is a signed statement from the buyer that names the buyer, gives its sales tax permit number, describes what it is buying, and declares that it will resell the goods. When a supplier accepts a properly completed certificate in good faith, the liability for any tax moves to the buyer.
This is why your suppliers ask for a certificate before they open a wholesale account, and why you should ask for one before you sell to another business tax-free. A missing certificate is one of the most common audit findings, and the bill lands on the seller, not the buyer.
A resale certificate is not the same as a seller's permit. The permit, called a sales tax permit, license or certificate of authority depending on the state, is your registration with the state revenue department. It lets you collect sales tax. The resale certificate is a separate form you fill in for each supplier, quoting that permit number. Texas states this outright: a copy of your permit is not a substitute for a completed certificate.
It also differs from an exemption certificate. A resale certificate covers goods you will resell. An exemption certificate covers goods you will use yourself but that are exempt because of who you are, such as a nonprofit or a government agency, or how you use them, such as manufacturing or farming. Some forms do both. Our sales tax exemption certificate guide covers that side.
Who can issue a resale certificate
You can issue a resale certificate when three things are true. You are in the business of selling the type of goods you are buying. You will resell them, either as they are or as a physical part of a product you sell. And you hold a sales tax permit in the state, or you fall into a category that state lets buy for resale without one.
The first test catches most misuse. California's certificate asks you to describe the type of property you sell, and the Texas Comptroller tells sellers to look at the general character of the buyer's business. Texas gives the example of a service station that hands in a resale certificate to buy a sofa: the seller should question it, because a service station doesn't normally resell furniture. A boutique buying dresses, a café buying takeaway cups that go out with each sale, or a furniture maker buying fabric that becomes part of a sofa all fit. The same boutique buying a cash register, shelving or printer paper does not, because it uses those items itself.
Resale certificate or pay tax?
| Purchase | Business | Resale certificate? |
|---|---|---|
Dresses for the rail | Clothing boutique | Yes — resold as they are |
Fabric that becomes part of a sofa | Furniture maker | Yes — part of the product sold |
Takeaway cups handed to customers | Café | Usually yes — goes out with each sale |
Shelving, cash register, printer paper | Any retailer | No — used by the business |
A sofa | Service station | No — not the kind of goods it sells |
Dresses for the rail
- Business
Clothing boutique
- Resale certificate?
Yes — resold as they are
Fabric that becomes part of a sofa
- Business
Furniture maker
- Resale certificate?
Yes — part of the product sold
Takeaway cups handed to customers
- Business
Café
- Resale certificate?
Usually yes — goes out with each sale
Shelving, cash register, printer paper
- Business
Any retailer
- Resale certificate?
No — used by the business
A sofa
- Business
Service station
- Resale certificate?
No — not the kind of goods it sells
Out-of-state buyers are the main grey area. A business with no presence in a state may not need a permit there, yet still buys goods from a supplier in that state for resale elsewhere. Rules differ. New York lets out-of-state businesses use Form ST-120 without a New York Certificate of Authority. The Streamlined form lets a buyer quote its permit number from any state, or a federal employer ID number if it doesn't need to register anywhere. Texas lets you issue a resale certificate for items you will resell in the United States or Mexico, but not in other countries.
State resale certificate forms: examples
Every state with a sales tax has its own rules, and most publish their own form. Some accept any document that contains the required information. Others insist on the state form. Here is how four of the largest states handle it, with a side-by-side table at the end.
Texas (Form 01-339). The front of the Texas form is the resale certificate. The back is the exemption certification for other exempt purchases, so use the side that fits. The buyer enters its Texas taxpayer number, describes the items, and signs. A seller can accept a blanket certificate only from a customer that buys exclusively for resale; otherwise it needs one for each purchase or a certificate that describes which purchases qualify. The Comptroller tells sellers to keep certificates for four years. Our Texas sales tax permit guide explains how to get the taxpayer number you'll need.
California (CDTFA-230). California doesn't require its own form, but the CDTFA-230 contains every element the law requires: the buyer's name, address and seller's permit number, a description of the property, the words "for resale", a signature and a date. The wording matters. A document that says "exempt" or "nontaxable" instead of "for resale" isn't a valid resale certificate. When a buyer is buying items it doesn't normally sell, the certificate should list those items specifically. The California sales tax guide covers seller's permits.
New York (ST-120). New York's form works as a single-purchase or blanket certificate. The buyer must get it to the seller within 90 days of the sale, and the seller keeps it for three years after the due date of the last return the certificate relates to. Construction contractors can't use ST-120 and have their own forms.
Florida (Annual Resale Certificate). Florida runs a different system. The Department of Revenue issues each registered dealer an Annual Resale Certificate that expires December 31 each year, and posts next year's certificate each November. Sellers can verify the buyer's certificate number online, by phone or with the state's mobile app. A valid result gives a transaction authorization number for one sale, or you can get an annual vendor authorization number for regular customers. Keep the verification records with your sales records.
| State | Form | Who can use it | Validity | Seller's check |
|---|---|---|---|---|
| Texas | 01-339 Resale Certificate / Exemption Certification | Holder of a Texas sales tax permit (Texas taxpayer number) | Until revoked; blanket allowed if all purchases are for resale | Permit search on the Comptroller site |
| California | CDTFA-230 General Resale Certificate | Holder of a California seller's permit (or explains why none is needed) | Until revoked or details change | CDTFA "Verify a Permit" tool or phone line |
| New York | ST-120 Resale Certificate | Registered vendor, or an out-of-state business not required to register | Blanket or single purchase | Must be received within 90 days |
| Florida | Annual Resale Certificate for Sales Tax | Registered Florida dealer | Expires December 31 each year | Online or phone verification gives an authorization number |
Multistate forms: the SST certificate and the MTC certificate
If you sell to buyers in many states, or buy from suppliers in many states, two multistate forms save a lot of paperwork.
The Streamlined Sales Tax Certificate of Exemption (SSTGB Form F0003) is accepted in all 24 Streamlined states: Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming. It covers resale (reason G) and a dozen exemption reasons on the same page. Unless you tick the single-purchase box, it is a blanket certificate that stays in force as long as purchases are no more than 12 months apart.
The SST form has the clearest rules on ID numbers. If you must register in the state, give that state's number. If you are not registered there, give your sales tax number from any state. If you aren't required to register anywhere, give your federal employer ID number, then another state business ID, then a driver's licence number. Foreign buyers can give a VAT-style number in the states that accept it, which the form lists. The seller doesn't have to check the buyer's ID number or decide whether the buyer should be registered, except in Georgia, which requires sellers to verify the number.
The Multistate Tax Commission's Uniform Sales & Use Tax Resale Certificate is the other option. North Carolina's Department of Revenue says it is accepted by 38 other states. It is for resale only. North Carolina, for example, does not accept it as an exemption certificate. Each state has notes on the form, and some require a registration number from that state while others accept a home-state number. The MTC itself says it cannot guarantee that any state will accept the certificate, and that the buyer and seller are responsible for using it correctly.
SST certificate vs MTC certificate
| Streamlined (SSTGB F0003) | MTC Uniform Resale Certificate | |
|---|---|---|
States | 24 Streamlined states | 38 states with state-specific notes |
Covers | Resale plus exemptions (government, nonprofit, manufacturing, agriculture and more) | Resale only |
Blanket use | Yes, while purchases are no more than 12 months apart | In many states; some require periodic renewal |
ID number | Any state's sales tax number if not registered in that state; FEIN if not required to register | Varies by state; some accept a home-state number |
Seller protection | Complete certificate within 90 days and no fraud | Depends on each state's good-faith rule |
States
- Streamlined (SSTGB F0003)
24 Streamlined states
- MTC Uniform Resale Certificate
38 states with state-specific notes
Covers
- Streamlined (SSTGB F0003)
Resale plus exemptions (government, nonprofit, manufacturing, agriculture and more)
- MTC Uniform Resale Certificate
Resale only
Blanket use
- Streamlined (SSTGB F0003)
Yes, while purchases are no more than 12 months apart
- MTC Uniform Resale Certificate
In many states; some require periodic renewal
ID number
- Streamlined (SSTGB F0003)
Any state's sales tax number if not registered in that state; FEIN if not required to register
- MTC Uniform Resale Certificate
Varies by state; some accept a home-state number
Seller protection
- Streamlined (SSTGB F0003)
Complete certificate within 90 days and no fraud
- MTC Uniform Resale Certificate
Depends on each state's good-faith rule
For sellers outside both groups, such as California, Texas, New York and Florida, it is safer to ask for the state's own form, or check the state's notes to see whether it accepts a multistate form.
How to fill in a resale certificate as a buyer
Filling in the form takes ten minutes. Getting it wrong can mean a supplier refuses it or, worse, an auditor rejects it years later and the supplier comes back to you for the tax.
Issue a resale certificate to a supplier
- 1
Register for a sales tax permit first
You need a permit in the state, or a number the form accepts (another state's number for SST, FEIN if you don't need to register anywhere).
Tip: Never quote a number you don't hold. Misuse is a misdemeanor or worse in several states.
- 2
Pick the right form
Use the supplier's state form, or the SST or MTC form if that state accepts it. Ask the supplier which it prefers.
- 3
Describe what you'll resell
Say what you sell in the regular course of business, such as "women's clothing and accessories". List specific items if they are outside your usual lines.
- 4
Choose blanket or single purchase
Blanket for a regular supplier of stock; single purchase for a one-off buy.
- 5
Sign, date and send it before the first invoice
Send it with your account application so the first invoice is tax-free. Keep a copy.
Two habits help. Keep a register of every certificate you have issued, with the supplier, date and form. Then, when your address, legal name or permit number changes, send updated certificates to every supplier on the list. Under the SST form and New York's rules, a certificate with out-of-date details stops protecting the seller, and suppliers will start charging tax.
How sellers accept resale certificates in good faith
As the seller, you carry the risk. Your protection is the good-faith rule, which every state has in some form. In general, you are protected if the certificate is complete, you received it on time, and you had no reason to believe the buyer was not buying for resale.
Complete. Check every field: buyer name and address, permit number, description of goods, the words "for resale" (in California), signature and date. The SST form treats sections 1 to 6 as required, but an electronic certificate doesn't need a signature. California says a missing date alone doesn't invalidate an otherwise valid certificate. An incomplete certificate is the most common reason auditors reject one.
On time. In Streamlined states, you are protected if the completed certificate reaches you at the time of sale or within 90 days after it. New York uses the same 90 days window, and if the certificate arrives later, both buyer and seller bear the burden of proving the sale was exempt. California treats a certificate as timely if you take it before you bill the buyer, within your normal billing and payment cycle, or at delivery. The safest practice everywhere is no certificate, no tax-free invoice.
In good faith. You can't accept a certificate when you know, or should know, the goods aren't for resale. A florist buying 2,000 roses on a resale certificate is normal. The same florist buying a commercial refrigerator is not, because it will use the fridge. California says a seller is presumed to act in good faith when the certificate contains all the essential elements and appears valid on its face, unless there is evidence to the contrary.
Verify the permit. Most states have a free lookup. California's CDTFA has an online "Verify a Permit, License, or Account" tool and a 24-hour phone line. Texas has a sales tax permit search. Florida's verification gives you an authorization number to keep. A permit lookup takes seconds and is the best evidence of good faith if an auditor questions a certificate later.
Record-keeping and how long to keep certificates
Keep every certificate you accept for at least the state's audit period, and longer if it covers sales still open to audit. Texas says four years. New York says three years after the due date of the last return the certificate relates to. Because a blanket certificate covers years of sales, the clock runs from the last sale it covers, not the date you received it.
Store certificates so you can find them by customer. Auditors usually pull a sample of exempt sales and ask for the certificate behind each one. If you can't produce it within the time the auditor allows, the sale is treated as taxable. Many sellers scan certificates into their accounting or e-commerce system and link them to the customer account, so a sale can't be invoiced tax-free without one on file. The SST form says certificates can be kept on paper or electronically, as long as you can provide them in the form you hold them.
Set a review date. Florida's certificates expire every December 31 each year, so you need fresh ones each year. Streamlined blanket certificates lapse if more than 12 months pass between purchases. Even in states with no expiry, refreshing certificates every two or three years catches closed businesses, changed addresses and revoked permits.
Worked examples: what a resale certificate saves and what a missing one costs
Example 1: a Texas boutique buying stock. A Houston boutique orders $12,000 of clothing from a Dallas wholesaler. Both are in Texas, and the combined rate in both cities is 8.25%. Without a certificate, the wholesaler would charge $12,000 × 0.0825 = $990 in tax. With a completed Form 01-339 on file, the invoice is $12,000. The boutique collects tax later on each dress it sells, at 8.25% of the retail price.
Example 2: taking stock out for your own use. The same boutique takes $400 of stock off the rail: a coat the owner keeps, and dresses used as window display props for the season and then thrown away. Display while goods are held for sale is fine, but these items will never be sold, and the coat is personal use. The Comptroller says items bought on a resale certificate and then used are taxable, based on purchase price or, for temporary use, fair rental value. The boutique reports $400 under "taxable purchases" on its Texas return and pays $400 × 0.0825 = $33 in use tax. Our use tax guide explains how to report it.
Try it — tax saved on a $12,000 stock order in Houston
Example 3: the supplier with missing certificates. An auditor reviews a California wholesaler and finds $50,000 of tax-free sales over three years with no resale certificates on file. The customers were in Los Angeles, where the rate is 10.25%. The wholesaler owes $50,000 × 0.1025 = $5,125, plus interest and possibly penalties. It can try to recover by getting certificates afterwards or showing the goods were in fact resold, but the burden is now on the wholesaler, and some customers will have closed.
Example 4: a buyer misusing a California certificate. A café owner with a seller's permit uses a resale certificate to buy a $3,000 laptop for the office. Under California law, a person who misuses a resale certificate for personal gain or to evade tax owes the tax plus a penalty of 10% of the tax or $500, whichever is greater for each purchase. The tax at 10.25% is $307.50. Ten percent is $30.75, so the $500 minimum applies: $807.50 plus interest, and the owner can also be charged with a misdemeanor.
Common mistakes and how to fix them
Using a resale certificate for supplies. Packaging that goes to the customer with the product, such as boxes, bags and labels, often counts as resold. Cleaning supplies, office equipment and fixtures don't. If you bought them tax-free by mistake, report use tax on your next return.
Assuming the permit is enough. Handing a supplier your permit number by email is not a certificate. The supplier needs the signed form.
Accepting certificates late. If you invoice tax-free and chase the certificate months later, you may be outside the 90 days window in Streamlined states and New York. Make the certificate a condition of opening a tax-free account.
Accepting out-of-state forms where they aren't valid. A California buyer's California certificate doesn't automatically work for a sale sourced to New York. Check the destination state's rules, or use the SST form for Streamlined states.
Not updating certificates after a change. A new legal entity (for example, converting from a sole proprietorship to an LLC) usually means a new permit number, which means new certificates to every supplier.
Forgetting drop shipments. When you sell to a customer and your supplier ships directly, the supplier may owe tax in the delivery state unless it holds your certificate. The SST form expressly allows a drop shipper to accept another state's ID number, so a retailer registered in only one state can still give a valid certificate in other Streamlined states. As your sales grow, check where you have economic nexus, because you may then need to register in the delivery state.
Resale certificate checklist
0/8Official forms and guidance
Resale certificate forms and rules
- Texas — Resale FAQ and Form 01-339Blanket rules, retention, misuse penalties
- California — CDTFA-230 General Resale Certificate
- California — Publication 103, Sales for Resale
- New York — Exemption certificates for sales tax (ST-120)
- Florida — Annual Resale Certificate (GT-800060)
- Streamlined Sales Tax — Member states and certificate
- MTC — Uniform Sales & Use Tax Certificate FAQ
What to do next
If you buy for resale, register for a permit, list your suppliers, and send each one a completed certificate this week. If you sell to other businesses, set your invoicing system so a customer can't be marked tax-free without a certificate on file, and verify each permit number once. Use the sales tax calculator to see what each tax-free order is worth, and our guides on how to calculate sales tax and Texas sales tax for the rates behind them.
This is general information, not legal or tax advice — confirm on the official source or with a professional.
Frequently asked questions
A resale certificate is a signed statement a business gives its supplier to buy goods tax-free because it will resell them. The supplier keeps it on file to show why it did not charge sales tax. The buyer then collects sales tax from its own customer when it makes the retail sale, so the tax is paid once, at the end of the chain.
No. The seller's permit (also called a sales tax permit or license) is your state registration to collect sales tax. The resale certificate is a form you fill in and hand to each supplier, quoting that permit number. Most states require you to hold a permit before you can issue a resale certificate, and a copy of the permit is not a substitute for the certificate.
It depends on the state. Blanket certificates in Streamlined states stay valid while purchases are no more than 12 months apart. Texas and California certificates stay valid until revoked or the details change. Florida issues a new Annual Resale Certificate each year that expires December 31 each year. Many sellers refresh all certificates every two to three years to be safe.
Often, yes. The Streamlined Sales Tax Certificate of Exemption covers the 24 Streamlined states and accepts another state's ID number when you aren't required to register there. The MTC Uniform Sales & Use Tax Resale Certificate is accepted by 38 states with conditions. California and Texas also accept out-of-state numbers in some cases. Check each state's notes before relying on it.
If the certificate was incomplete, received too late, or accepted when the seller knew the goods were not for resale, the auditor treats the sale as taxable and the seller owes the tax, plus interest and often penalties. A complete certificate accepted in good faith shifts the liability to the buyer, which is why sellers should check every certificate before invoicing tax-free.
Yes, usually. When a retailer orders from a supplier that ships straight to the customer, the supplier may owe tax in the delivery state unless it holds the retailer's resale certificate. The Streamlined form lets the retailer quote a sales tax number from any state, and many states accept that for drop shipments, so ask each supplier which form it needs.
Sources & verification
Figures on this page were checked against the sources below when it was last reviewed on 9 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify
- 1.Texas Sales and Use Tax Frequently Asked Questions — Resale — Texas Comptroller of Public Accounts · accessed 9 October 2026
- 2.CDTFA-230 General Resale Certificate — California Department of Tax and Fee Administration · accessed 9 October 2026
- 3.Valid Resale Certificates — Publication 103, Sales for Resale — California Department of Tax and Fee Administration · accessed 9 October 2026
- 4.Streamlined Sales Tax Certificate of Exemption (SSTGB Form F0003, rev. 12/21/2021) — Streamlined Sales Tax Governing Board (hosted by Nevada Department of Taxation) · accessed 9 October 2026
- 5.FAQ — Uniform Sales and Use Tax Certificate Multijurisdictional — Multistate Tax Commission · accessed 9 October 2026
- 6.Uniform Sales & Use Tax Certificate — Multijurisdiction — North Carolina Department of Revenue · accessed 9 October 2026
- 7.Exemption Certificates for Sales Tax (TB-ST-240) — New York State Department of Taxation and Finance · accessed 9 October 2026
- 8.Florida Annual Resale Certificate for Sales Tax (GT-800060) — Florida Department of Revenue · accessed 9 October 2026
- 9.Streamlined Sales Tax — Member states — Streamlined Sales Tax Governing Board · accessed 9 October 2026
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