Intermediate How-To

How do I accept a resale certificate from a B2B buyer?

⚡ TL;DR

Collect the correct form for the ship-to state (SST uniform certificate for all 24 SST states, state-specific form for others), verify it's complete and signed, check the buyer's registration number through the state DOR portal, and retain it for at least 3–4 years. A missing or incomplete certificate leaves the tax liability with you.

Accepting a resale certificate correctly protects you from owing the tax yourself if the exemption is challenged later. A valid, properly retained certificate shifts liability to the buyer: an invalid or missing one leaves the liability with you. Here’s the process.

Step 1: Determine which certificate to collect

The correct certificate depends on the buyer’s state, specifically, the state where the transaction is sourced (typically where the goods are delivered).

SST uniform exemption certificate: Accepted in all 24 SST member states. If the buyer’s delivery state is an SST member state, this single form works. SST member states include Washington, Pennsylvania, Ohio, Michigan, Nevada, and 19 others.

State-specific certificate: Most non-SST states require their own form. Common examples: California’s BOE-230, Texas’s Form 01-339. Each state’s DOR website provides the current version of its required form.

MTC uniform certificate: The Multistate Tax Commission uniform sales and use tax certificate is accepted by some non-SST states as an alternative to state-specific forms. Check each state’s acceptance before relying on it.

Never accept a certificate without confirming it’s an accepted form for the ship-to state.

Step 2: Verify the certificate is complete

A certificate is only valid if properly completed. Review for:

Buyer’s legal business name: must match their registration
Buyer’s sales tax registration number (or FEIN, in states that accept it)
State of registration: matches the ship-to state or an accepted multi-state form
Description of goods being purchased, should be consistent with resale of your product type
Claimed exemption reason: should say “resale” or “for resale”
Buyer’s signature and date

An unsigned certificate is not valid. A certificate with blank required fields is not valid. Return incomplete certificates and request a corrected version before making the exempt sale.

Step 3: Check the buyer’s registration number

Most states allow you to verify a sales tax registration number online through their DOR website. Enter the buyer’s number and confirm it returns an active registration.

This step takes 60 seconds and provides meaningful protection. An invalid registration number on the certificate is a red flag: the buyer may not actually be a registered reseller.

For high-value or high-volume accounts, verify registration numbers at least annually, as permits can lapse.

Step 4: Assess plausibility

A valid certificate from a registered seller isn’t automatically correct. Ask whether the claimed resale use is plausible for your goods:

A grocery store buying packaged food for resale: plausible
An accounting firm buying office furniture claiming resale: not plausible

If the claimed use doesn’t make sense for the buyer’s business type and your product type, the certificate doesn’t protect you. You can ask the buyer to clarify, or decline the exemption and collect tax.

Step 5: Retain the certificate

Store the certificate for at least as long as the statute of limitations in the relevant state, typically 3–4 years. For ongoing accounts, retain the certificate plus all orders covered by it.

Digital retention is fine in most states. Scan paper certificates and store them in a searchable system tied to the customer account. Auditors may request certificates for specific transactions.

Step 6: Set up the account for tax-exempt treatment

Once you have a valid certificate, mark the buyer’s account as tax-exempt for the covered state(s) and product scope. Document when the certificate expires and set a reminder to collect a new one in advance of expiration.

Blanket certificates for ongoing accounts

For repeat B2B buyers, a blanket (also called “continuous”) certificate covers all purchases of the same type over a period rather than requiring a new certificate per transaction. Most states allow blanket certificates for customers with ongoing resale activity. Blanket certificates still expire and must be renewed. See: What is a blanket exemption certificate?

Drop shipping complications

If you’re a drop-shipper (fulfilling orders on behalf of a retailer-seller) the exemption certificate situation is more complex. The retailer needs to provide you a valid resale certificate for the ship-to state. If the retailer isn’t registered in that state and can’t provide one, you may need to collect tax on the transaction. See: Does drop shipping create physical nexus?

Frequently asked questions

What is a resale certificate?

A resale certificate is an exemption certificate a buyer provides to claim that they're purchasing goods for resale rather than personal consumption. Because they'll collect sales tax when they sell the item to the end customer, they don't pay sales tax on their purchase from you. Resale certificates are the most common exemption certificate type for B2B sellers.

Does a resale certificate from one state work in other states?

Usually no. Most states require their own certificate form or an accepted alternative. The SST uniform exemption certificate is accepted in all 24 SST member states. A few states accept the Multistate Tax Commission uniform certificate. For non-SST states, you typically need the state-issued form. Accepting a certificate from the wrong state, or a form that state doesn't accept, may not protect you in an audit.

How do I verify a resale certificate is valid?

Check that it's complete (all required fields filled, signed), the claimed exemption reason is plausible for the type of goods you're selling, and the buyer's sales tax registration number is valid. Most state DOR websites allow you to verify a registration number online. For high-volume accounts, verify annually.

What if a buyer's certificate expires?

Most states require renewal every 1–5 years. If a certificate expires, stop applying the exemption and request a new certificate before the next order. Document the request. If the buyer doesn't provide a renewal, collect tax on subsequent orders until you have a valid current certificate.

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