Do resale certificates apply to both buying AND selling? Confused about purchasing exemptions

You've got it mostly right! A resale certificate (sometimes called a tax exemption certificate) serves primarily as documentation that allows you to purchase items tax-free that you intend to resell. It's definitely relevant for both buying AND selling sides of transactions. When you're purchasing: You present your resale certificate to your supplier to prove you're buying items for resale, which exempts you from paying sales tax on those items. When you're selling: You collect resale certificates from your customers who are buying your products for resale, which allows you to not charge them sales tax. For your specific situation - if you're buying products in the US but only selling them outside the US (exporting), you would indeed benefit from having a resale certificate to avoid paying sales tax on your purchases. Since those items are ultimately being exported and sold outside the US, they're essentially being "resold" in another market.

I was in the exact same boat as you last year trying to figure out this confusing mess. I kept getting conflicting advice until I found a super helpful AI tool called taxr.ai (https://taxr.ai) that saved me so much time. I uploaded my business documents and it spelled out exactly what I needed for my specific situation in California. The tool confirmed that I did need a resale certificate to avoid paying sales tax on purchases intended for export, and even helped me generate the proper documentation. It was especially helpful because my suppliers were giving me different answers about what I needed to provide them.

Just wanted to follow up about my experience with taxr.ai that was mentioned above. I decided to try it for my multi-state nexus questions, and it was incredibly helpful! It analyzed my business structure and provided specific documentation requirements for each state where I have sales tax obligations. The tool identified three states where I needed to register for resale certificates that I wasn't even aware of, and explained exactly how to use them for both purchasing and selling. Saved me from what could have been a huge tax headache later. Definitely worth checking out if you're dealing with these kinds of questions.

If you're struggling to get answers from your state's department of revenue like I was (spent WEEKS trying to reach someone), I finally got through using Claimyr (https://claimyr.com). They have this service that basically holds your place in line when calling government agencies. You can see how it works here: https://youtu.be/_kiP6q8DX5c I needed clarification on exactly this question about resale certificates for exports, and the state tax office was the only place that could give me a definitive answer for my situation. Claimyr got me connected to a real person in about 20 minutes when I had previously been hanging on hold for hours only to get disconnected.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it when I needed to reach my state's tax department about my resale certificate application that had been pending for months. Got connected to a real person in about 35 minutes when I had previously wasted three afternoons on hold. The tax agent I spoke with confirmed exactly what others have said here - resale certificates are definitely for both purchasing AND selling. She also helped me understand that for my export business, I needed to maintain proper documentation showing that the goods I purchased tax-free were indeed exported out of state. Apparently, this is something they look for during audits.

I run a small business and I can add some practical experience here. Just having a resale certificate isn't enough - you need to use it correctly! When purchasing, you typically need to provide a copy to each vendor you buy from tax-free. Some vendors will keep it on file, others require you to submit it with each order. Also, many states require you to fill out the certificate properly for each purchase, specifying exactly what you're buying for resale. If you buy mixed items (some for resale, some for business use), you should only claim the exemption on the resale items.

Quick tip from someone who's been audited for sales tax issues - keep REALLY good records of your resale certificate usage. When you buy stuff tax-free using your resale certificate, make sure you can prove that those exact items were either: 1) Resold to customers (with sales records) 2) Incorporated into products you later sold 3) Exported out of state/country The auditor made me provide documentation for a sample of purchases going back 3 years! If you can't prove the items were resold or exported, they'll assess sales tax plus penalties and interest.

One thing nobody's mentioned yet - in most states, misusing a resale certificate is actually a criminal offense! If you use it to buy things tax-free that you don't intend to resell, you could face penalties. I had a friend who bought office furniture using their resale certificate (thinking all business purchases qualified) and got hit with a huge penalty plus interest during an audit.