Overview of Resale Certificates in South Carolina
Typically, retailers like auto parts stores use resale certificates to buy wholesale goods without paying sales tax in South Carolina. To do this, you must obtain a resale certificate from the Department of Revenue and also have a seller’s permit to collect sales tax from buyers.
When presented with a South Carolina resale certificate, sellers must collect and validate certificates before exempting tax. Failure to do so may result in fines and penalties.
Requirements for Resale Certificates
- In South Carolina, a resale certificate allows a business to buy goods tax-free for resale, distinct from a sales tax license.
- Acquire the resale certificate from the Department of Revenue in South Carolina. Additionally, obtain a separate seller’s permit for collecting sales tax.
Compliance and Potential Penalties
- South Carolina permits out-of-state resale certificates, but businesses must verify information such as the registration number. Avoid fraudulent activities to prevent facing fines and penalties.
- It is generally necessary to have a sales tax permit to utilize a resale certificate. States usually do not mandate extensive verification of certificates. If customers provide falsified documents and you made a reasonable effort, you are not held liable.