Start typing a search term Resale CertificatesWhy are resale certificates required?A taxable item that is purchased for resale is exempt from sales or use tax if the seller accepts a properly completed Form 01-339, Texas Sales and Use Tax Resale Certificate (PDF), instead of collecting the sales tax due. The resale certificate is the seller’s evidence as to why sales tax was not collected on that transaction and should be retained in the seller’s books and records for four years. While resale certificates require the purchaser’s Texas taxpayer number, the customer's sales tax permit number or a copy of the customer's permit is not a substitute for a resale certificate and does not relieve a seller’s responsibility for collecting sales tax. As a purchaser, what can I buy tax free by issuing a resale certificate under my taxpayer number?You can use a resale certificate to purchase the following items tax free:
If you use the merchandise that you purchased by issuing a resale certificate, then you owe tax on the merchandise. (For example, you purchased brooms for resale, but pulled one out of inventory and used it to sweep your store.) You must pay the sales tax either on the fair market rental value for the period of use of the merchandise or on your purchase price of the item. You can do this by including this amount in the “taxable purchases” line of your return. You should not use a resale certificate if there is any question whether you will resell the property. If you are purchasing a combination of items and some are for resale while others are not for resale, you must clearly indicate to the vendor which items will be resold and on which the vendor should not collect tax. Do I need to submit a resale certificate each time I make a purchase?Yes, except that if a customer purchases exclusively for resale, a seller can accept a blanket resale certificate. The certificate should state that all purchases will be resold in the regular course of business. What are my responsibilities as a seller accepting a resale certificate?You must make sure that the resale certificate is properly completed. As a seller, you should always note the general character of the purchaser's business. If the nature of the business is such that the property purchased would not normally be resold, you should question the use of the certificate. For example, you should not accept a resale certificate describing the business as a service station for the purchase of a sofa or other item not regularly sold by service stations. You should not accept the certificate if you know or have reason to believe the property is being purchased for other than resale. You must retain the resale certificates in your records (for four years) that you accept to substantiate claims that a sale was for resale and therefore exempt from tax. Yes. You can verify that a seller's permit is active using the Comptroller's Sales Tax Permit Search. Can I issue a resale certificate if I buy items that will be resold in Mexico or another country?You can issue a resale certificate if you intend to resell the taxable items in the United States or in Mexico, but not in any other countries. Are there any penalties for the illegal use of a resale certificate?Yes. Refer to the table below. Penalties for Illegal Use of Resale Certificates
How do I fill out a Texas sales tax exemption form?An exemption certificate must show:. (1) the name and address of the purchaser;. (2) a description of the item to be purchased;. (3) the reason the purchase is exempt from tax;. (4) the signature of the purchaser and the date; and.. (5) the name and address of the seller.. What qualifies for Texas sales tax exemption?An individual can give Form 01-339, Texas Sales and Use Tax Exemption Certification (PDF), to the seller instead of paying sales tax when buying items to be directly donated to the following exempt organizations: religious, charitable, educational, nonprofits exempt under IRC Sections 501(c)(3), (4), (8), (10) or (19), ...
What are some examples of tax exemptions?Certain types of income, such as portions of retirement income and some academic scholarships, are tax exempt, meaning that they are not included as part of a filer's taxable income.
What is the meaning of exempt purchases?Related Definitions
Exempt Purchase Order means a purchase order for the Business entered into in the ordinary course of business which contains an order for goods, including fabric, finished ties, and all trim so long as such purchase order covers a period of three months or less.
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