A Texas Resale Certificate, also known as a Sales Tax Permit, allows businesses to purchase goods and services tax-free for resale to customers. This certificate acts as proof that the goods and services purchased will be sold and taxed to the end-consumer, not to the business purchasing them. Obtaining a Texas Resale Certificate is a simple process that requires following a few steps.
Step 1: Determine Eligibility
To be eligible to obtain a Texas Resale Certificate, a business must meet the following criteria:
- Must be engaged in a taxable business activity, such as retail sales, manufacturing, or wholesale distribution.
- Must have a physical location in Texas or be planning to establish a physical location.
- Must have a sales tax number assigned by the Texas Comptroller of Public Accounts.
Step 2: Register Your Business
If your business is not already registered with the Texas Comptroller of Public Accounts, you will need to register your business and obtain a sales tax number. This can be done online by visiting the Comptroller’s website and completing the online application.
Step 3: Complete the Texas Resale Certificate Form
The Texas Resale Certificate form can be found on the Texas Comptroller of Public Accounts website. This form must be completed in its entirety and signed by an authorized representative of the business. The form must be submitted to the Comptroller’s office along with a copy of your business license and sales tax number. The Comptroller will review your application and notify you when it has been processed.
Step 4: Submit the Texas Resale Certificate Form
Once the form is completed, it must be submitted to the Texas Comptroller of Public Accounts either by mail, fax, or online.
If you would like to submit the form online, you can do so by logging in to your account on the Texas Comptroller of Public Accounts website and uploading the completed form.
Step 5: Wait for Approval
Once the Texas Resale Certificate form is submitted, it will be reviewed by the Texas Comptroller of Public Accounts. The approval process typically takes 2-3 business days. If the form is approved, a Sales Tax Permit will be issued to the business. If the form is not approved, a letter will be sent to the business outlining any errors or additional information that is needed.
Step 6: Keep the Texas Resale Certificate Current
It is important to keep your Texas Resale Certificate current. The certificate must be renewed annually by submitting a renewal form (Form 01-117) to the Texas Comptroller of Public Accounts. If the business changes its address, the certificate must also be updated with the new address.
Using Your Texas Resale Certificate
Once your Texas Resale Certificate has been approved and issued, you can use it to purchase goods and services tax-free for resale. When making a tax-free purchase, the business must provide the seller with a copy of the certificate and the seller must keep a copy on file.
It is important to note that the Texas Resale Certificate can only be used for purchases made for resale. If the business uses the goods and services purchased for any purpose other than resale, the business will be responsible for paying the applicable sales tax on the purchase.
Obtaining a Texas Resale Certificate is a simple and straightforward process. By following the steps outlined above, a business can purchase goods and services tax-free for resale to customers, saving the business money and reducing the overall cost of goods sold. With a Texas Resale Certificate, a business can focus on growing its business and providing customers with the products and services they need.