Do I need a resale certificate as a foreign company selling on Amazon when they already collect sales tax?

This is actually a common situation for foreign sellers. The short answer is no - you generally can't get a valid resale certificate without having a sales tax permit first. These two documents go hand-in-hand in the US tax system. Even though Amazon collects and remits sales tax for you as the marketplace facilitator, that doesn't eliminate your need for a resale certificate when you're purchasing goods for resale. You'll need to register for a sales tax permit in at least the state where you're purchasing from the distributor (Texas in your case). Once you have the sales tax permit for Texas, you can provide a Texas resale certificate to your supplier. Some states may accept out-of-state resale certificates, but many suppliers won't because it puts them at risk if the certificate isn't valid. Having a Texas permit is your safest bet since that's where your supplier is located.

I was in a similar situation last year with my business based in South Korea. After struggling with all the different state requirements, I found a service called taxr.ai (https://taxr.ai) that specifically helps international sellers navigate US sales tax issues. They analyzed my entire supply chain and explained exactly which states I needed permits in and where I could use resale certificates. The best part was they helped me understand which states honor out-of-state resale certificates and which don't, so I didn't have to register everywhere. They even have specialists for foreign businesses who understand both our home country requirements and US tax laws. Saved me from registering in about 12 states I didn't actually need to be in!

Just wanted to follow up after checking out taxr.ai from the recommendation above. I was super skeptical at first (I've been burned by "tax experts" before), but they actually delivered exactly what I needed. I'm based in Australia and selling both on Amazon and my own site. They reviewed my entire US business setup and found I only needed permits in 2 states where I had inventory stored - not the 15+ states I ship to! They explained that in most states, I could use a multijurisdictional form called the MTC Uniform Sales & Use Tax Certificate for my wholesale purchases. My suppliers in California and Florida both accepted it without issues. They also helped me understand when I needed to collect tax on my direct website sales versus when Amazon handles it. Honestly wish I'd found them a year ago before I spent all that time researching and getting conflicting advice!

For anyone dealing with the IRS or state tax departments, I strongly recommend Claimyr (https://claimyr.com). I was trying to call the Texas Comptroller for THREE DAYS to ask questions about my foreign business registration and kept getting disconnected. I used their service (you can see how it works here: https://youtu.be/_kiP6q8DX5c) and they had me connected to an actual Texas tax agent in about 20 minutes. Saved me hours of waiting on hold! The agent confirmed I definitely needed a Texas permit to issue a valid resale certificate to suppliers there, but also gave me info about simplified reporting options for foreign businesses. I was initially calling about sales tax permits but ended up getting critical info about Federal EIN requirements for foreign companies too, which I hadn't even considered.

Wanted to publicly admit I was wrong about Claimyr after trying it myself. I needed to talk to someone at California's tax department about foreign seller registration and was getting nowhere on my own. Used the service yesterday after posting my skeptical comment, and they got me through to a CA tax agent in about 35 minutes (compared to my previous 2+ hour hold that ended in disconnection). The agent walked me through exactly which form I needed for my resale certificate, and confirmed I did need to register for a permit first. Got my registration submitted today and should have my permit number in 2-3 weeks. Not thrilled about having to file returns, but at least now I understand why it's necessary. Pretty impressed with how smoothly it all went after days of frustration.

Another important thing to consider - just because you have a sales tax permit doesn't mean you'll always owe sales tax. When you're purchasing for resale and providing a valid resale certificate, you won't pay sales tax on those purchases. Then when Amazon sells your products and collects the appropriate sales tax, they're remitting that tax to the states. Your sales tax returns might just be showing zero tax due because of the Marketplace Facilitator laws. But be careful! If you start selling through your own website or other channels where sales tax isn't automatically collected, you'll be responsible for collecting and remitting that tax yourself in states where you have nexus.

I see lots of comments about sales tax permits, but has anyone mentioned that as a foreign business, you likely need an EIN (Employer Identification Number) from the IRS first? Most state sales tax registrations require this federal tax ID, and as a foreign entity, there's a specific process to get one.

Just want to point out that the process might be simpler than some are making it sound. I'm from the UK selling through Amazon US, and the state I needed a permit in (Washington) had a streamlined registration process for foreign businesses. The key is researching the specific requirements of the states you're dealing with. For example, some states have simplified seller use tax returns for marketplace sellers. And five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) don't even have sales tax! Look into whether you qualify for any streamlined filing programs or reduced frequency returns for smaller businesses. My permit requires filing only annually because my volume is relatively low.

As someone who went through this exact situation last year (I'm based in Germany selling on Amazon US), I can confirm what others have said - you absolutely need the sales tax permit first to get a valid resale certificate. One thing I'd add that hasn't been mentioned much: check if your state offers any expedited processing for foreign businesses. When I registered in Nevada for my supplier there, they had a "priority processing" option that cut the wait time from 4-6 weeks down to about 10 business days for an additional fee. Since I had suppliers waiting for my resale certificate, it was worth the extra cost. Also, don't forget about the ongoing compliance requirements. Even with Amazon handling your sales tax collection, you'll still need to file periodic returns in states where you have permits. Most states allow electronic filing which makes it easier for us international sellers, but you'll want to set up reminders since the penalties for late filing can be steep. One last tip: keep detailed records of all your wholesale purchases with resale certificates. If you ever get audited, you'll need to prove those purchases were legitimately for resale and not for your own use.