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.
Getting a Resale Certificate
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 from South Carolina buyers.
When presented with a South Carolina resale certificate, sellers must:
- Collect and validate certificates before exempting tax
- Store certificates for future purchases or audits
If sellers fail to maintain proper records and face an audit, they will be responsible for fines and penalties.
Most states accept out-of-state resale certificates, but it’s important to check if purchasing items for resale outside your state. Are sellers required to accept resale certificates? No, sales tax obligations are from the state or local tax jurisdiction, not individual retailers.
Seller’s Permit and Sales Tax
Sellers need permits to collect sales tax. Businesses that need them include:
- Gardening stores
- Mechanic shops
- Wholesalers and retailers
- Online sellers
Businesses that use trade names need DBA (Doing Business As) registrations, and seller’s permits allow tax collection within the state or local jurisdiction. Ownership changes invalidate licenses, and new owners must obtain them.
To apply for a sales tax license, you can do so online or with a form. Each license costs $50. Licenses will not be issued if taxes are owed until payment is complete.
Assumed business names need registrations if the LLC or corporation name isn’t used. Sole proprietors need them to use trade names. States require seller’s permits to enable sales tax collection. Failure to obtain them risks penalties, fines, and back taxes.
Acquire seller’s permits from the state, usually online by submitting business information. After review, the state issues the permit. Note that a tax ID and EIN (Employer Identification Number) differ significantly.