Typically, retailers use resale certificates to buy wholesale goods without paying sales tax. 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.
Validating and Using Resale Certificates
When presented resale certificates, sellers must collect and validate them before exempting tax. Certificates should be stored for purchases or audits. If sellers fail to do this and face an audit, they will be responsible for fines and penalties.
Make sure the resale certificate is not expired. Sellers may choose not to honor resale certificates if anything is out of order. Resale exemptions allow your customer to acquire property tax-free if it will later be resold.
You can’t use an out-of-state permit to create documentation in ten states:
- Alabama
- California
- Florida
- Hawaii
- Illinois
- Louisiana
- Maryland
- Massachusetts
- Washington
- Washington, D.C.
If you purchase inventory and re-sell it, your supplier may ask for a resale certificate so the purchases are tax-free.
State-Specific Regulations
South Carolina allows out-of-state resale certificates, but verify information like the registration number. Don’t participate in fraud or you may face fines and penalties. Pennsylvania doesn’t allow out-of-state resale certificates. Businesses there need a valid Pennsylvania sales tax number.
You generally need a sales tax permit to use a resale certificate. Though called a certificate, it may just be certain information. States don’t require you to verify certificates extensively. If customers falsify documents and you made a good faith effort, you aren’t liable.
South Carolina Resale Certificate Details
In South Carolina, a resale certificate allows a business to buy goods tax-free for resale. It differs from a sales tax license, which allows a business to collect sales tax from customers.