Resale Certificate Usage and Requirements
Typically, retailers use resale certificates to buy wholesale goods without paying sales tax. You’ll need a separate seller’s permit to collect sales tax. When presented resale certificates, sellers must collect and validate them before exempting tax. If sellers fail to do this and face an audit, they will be responsible for fines and penalties.
You generally need a sales tax permit to use a resale certificate. States don’t require you to verify certificates extensively. If customers falsify documents and you made a good faith effort, you aren’t liable.
Obtaining Resale Certificates in South Carolina and New Mexico
South Carolina:
To get a resale certificate in South Carolina, you’ll need to obtain it from the Department of Revenue. You’ll also need a separate seller’s permit to collect sales tax. When presented with a South Carolina resale certificate, sellers must collect and validate certificates before exempting tax. If sellers fail to do this and face an audit, they will be responsible for fines and penalties.
New Mexico:
New Mexico does not require sellers to have a sales tax permit to use a resale certificate. For that reason, New Mexico has two different resale certificate forms. To get a resale certificate in New Mexico, first get a New Mexico Sales Tax Permit also called a CRS Number. This ID Number makes you eligible for a resale certificate. Next, print out and present the certificate to suppliers when purchasing items for resale. If you are not required to register in New Mexico, fill out another resale certificate form.
Supplier Acceptance and Application Process
Suppliers can refuse resale certificates. However, refusing an invalid certificate makes the supplier responsible for sales tax. Download the form, mail it, and receive the certificate within seven days. Present this to vendors and keep a copy for records.