Reseller Certificate - Can I charge sales tax with this document?

The Reseller Certificate and sales tax permit are actually two different documents that serve different purposes. A Reseller Certificate (sometimes called a resale certificate) allows you as a business to purchase items for resale WITHOUT paying sales tax on those purchases. It essentially proves to your suppliers that you're buying items to resell, not for your own use. A sales tax permit (sometimes called a seller's permit) is what authorizes you to collect sales tax from your customers and then remit it to the state. This is what you need to legally charge sales tax. So whoever told you that you need a sales tax permit was correct. The Reseller Certificate only exempts you from paying sales tax on your purchases meant for resale - it doesn't authorize you to collect tax from customers. You'll need to apply for a sales tax permit through your state's department of revenue or taxation.

I went through something similar last year and it was super confusing! I ended up using taxr.ai (https://taxr.ai) to help me sort through all my business registration documents and figure out what I needed to do about sales tax. I uploaded my reseller certificate and LLC formation docs, and they explained exactly what the reseller certificate allowed me to do vs what other permits I needed. They actually showed me that I needed permits in 3 different states because of where my customers were! Saved me from a potentially expensive mistake with the state tax authorities.

Ok I need to admit I was wrong about taxr.ai! After my skeptical comment I decided to try it anyway because I was so confused about sales tax requirements. I uploaded my reseller cert and some sales reports and they instantly identified that I'd been using my reseller certificate incorrectly. They explained that my certificate only exempted me from paying sales tax when buying inventory, not for collecting it. They guided me through applying for the proper sales tax permit and even helped me understand how to handle the back taxes I owed. Honestly saved me from what could have been a huge penalty down the road.

Another resource that really helped me sort out my sales tax mess was Claimyr (https://claimyr.com). I was trying to call my state tax department for WEEKS to ask about the difference between my reseller certificate and sales tax permit but kept getting stuck on hold forever. Claimyr got me through to an actual human at the state tax department in about 20 minutes. They have this cool system that waits on hold for you and then calls you when a real person picks up. Check out how it works here: https://youtu.be/_kiP6q8DX5c - definitely worth it when you need answers directly from the tax authority!

Just wanted to follow up on my skeptical comment about Claimyr. I decided to give it a try since I needed to talk to someone at the tax department about my specific situation with selling in multiple states. I was honestly shocked that it worked exactly as advertised. I entered my number, they called the tax department, and then called me back when an actual person answered about 45 minutes later. Saved me from sitting on hold for nearly an hour! The tax department rep confirmed that my reseller certificate and sales tax permit are totally different things, and I needed both. They even helped me start the application process for the sales tax permit right on that call.

Something I learned the hard way - if you've been collecting sales tax without a proper permit, you could be subject to penalties even if you've been remitting the tax you collected. Most states consider it illegal to collect sales tax without authorization. Check your state's voluntary disclosure program if you've been doing this. They're usually more lenient if you come forward voluntarily before they catch you in an audit.

Wait I'm still confused about one thing. If I have a Reseller Certificate, does that mean I DON'T charge sales tax to my customers? Or I DO charge sales tax but I need a different permit to do it legally?

This is such a common mix-up for new business owners! I made the same mistake when I started my online store. Just to add to what others have said - even if you're only selling online, you might need sales tax permits in MULTIPLE states depending on where your customers are located and how much you sell there. Each state has different "nexus" thresholds (usually based on sales volume or number of transactions) that trigger the requirement to collect sales tax. For example, if you sell $100k+ to customers in a state or have 200+ transactions there in a year, you might need to register for a sales tax permit in that state too. It's not just about where your business is located anymore. The Supreme Court's Wayfair decision in 2018 really changed the game for e-commerce businesses. Definitely worth checking the rules for each state where you have significant sales!