Business

How to Get a Resale Certificate in Pennsylvania

Pennsylvania has a population of nearly 13 million, and when you combine the population with access to most of the US population within a short drive it makes an excellent location for just about any business.

If you have considered selling goods or services within this state, you have an above-average chance of thriving. One of the basic things you should do before your venture begins is to ensure you comply with the set tax laws.

In Pennsylvania, businesses may purchase items tax-free to resell. Sales tax will then be collected when the items are sold at retail.

In a Hurry? Here is the Resale Certificate Form from the Pennsylvania Department of Revenue for every industry to get your Pennsylvania Resale Certificate.

Read on to learn more details, including how to get a resale certificate in Pennsylvania.

How Do I Obtain A Resale Certificate In Pennsylvania? 

Obtaining a resale certificate in Pennsylvania is not as challenging as many may assume. You merely need to fill out the Resale Certificate). You can get this form in PDF on the Pennsylvania Department of Revenue site. This is the same site you should visit to get other necessary business tax forms.

Filling out the forms is easy-peasy. The process merely requires providing basic information such as your Pennsylvania sales tax permit number, a general description of your type of merchandise, your name, and your address. If you apply for a blanket resale certificate, it will remain valid for as long as the authorities don’t revoke it in writing.

Pennsylvania Resale Certificate
Pennsylvania is one of the best states to start a business

Guide for Filling out a Pennsylvania Resale Certificate

One certificate is enough to show that all purchases are intended to be resold and, therefore, exempt from taxation. This makes the process of filling out the form relatively easy because you can always apply for a blanket certificate. For you to avoid getting into trouble with the taxman and for a seller to accept your certificate, it is crucial to have filled out the Pennsylvania resale form correctly.

Here is a step-by-step guide on how to fill out this important form.

  • Step 1

Download Pennsylvania Sales and Use Tax Resale Certificate from the Department of Revenue site.

  • Step 2

Provide basic information about your name, phone number, and address

  • Step 3

Key in the Pennsylvania Sales Tax License Number

  • Step 4

Provide the name and address of a seller

  • Step 5

Describe the items to be acquired in a brief

  • Step 6

Describe your business and what you sell in brief

  • Step 7

Indicate that the property you want to buy is for resale. Include the date on the certificate and sign.

How and When To Use A Pennsylvania Resale Certificate

Once you have obtained your resale certificate, you must submit it to a seller anytime you want to acquire resale goods. It is illegal for a seller to allow you to purchase goods tax-free if you fail to produce your original sales tax license.

As the holder of a resale certificate in the state, your responsibilities include:

  • Don’t use the resale certificate when purchasing goods not intended for resale.
  • If you opt not to resell an item you purchased tax-free using the certificate, make sure you take care of the taxes you are owned.
  • Don’t use the certificate as a means to evade taxes. This is illegal and can be charged as a felony or misdemeanor, depending on the accumulated taxes that are evaded. Evaded taxes amounting to more than $750 but less than $20,000 can attract third-degree felony charges. On the other hand, evaded taxes amounting to $20,000 or more attract second-degree felony charges.

Sellers also have responsibilities that cannot be escaped when accepting resale certificates. They include:

  • You have to confirm the proper completion and validity of the resale certificate.
  • Don’t accept certificates if you suspect the goods being bought are not for resale purposes.
  • You must keep each retail certificate for about four years in your records. This allows you to validate claims that goods bought were for resale and hence exempted from tax.

What Should You Do If Someone Presents To You a Pennsylvania Resale Certificate?

Whether you are a wholesaler or retailer, someone may present a PA resale certificate when making a purchase. Here are the steps to take:

Step 1- Do a Brief Verification Process

It is crucial to confirm that the Pennsylvania resale certificate presented is filled out with all the essential information. This may include the buyer’s name and the items they sell, a general description of the goods bought for resale purposes, and the name of your store. Additionally, ensure you get the address and signature of the buyer.

The need to verify that a certificate contains all the vital information must not be underestimated. If any of the details are missing and you still proceed to offer a tax-free purchase, you may end up in trouble in case of an audit.

Step 2- Verify the Authenticity of the Certificate

If a Texas resale certificate has all the needed information, this is a good sign. However, it would be best to protect yourself further by checking the validity of the document with the state. This can easily be done online through a Pennsylvania Tax Permit Search.

Step 3- Keep Your Records

Having the certificate on file is essential, just in case the auditors knock on your door because of sales taxes that were dodged. Usually, a buyer can use the same certificate as long as their sales tax ID does not change, and they continue trading in the same selection of taxable services.

What is the history of Pennsylvania resale certificates?

Resale certificates have been around for well over a decade. In fact, the concept of resale certificates is as old as auctioning itself and came about because consumers demanded it. Consumer surveys conducted in the late 1980s showed that consumers wanted to be able to buy goods at lower prices than those at retail stores. These surveys were pivotal in providing the impetus for a federal law to require large ticket sellers (over $500) to provide buyers with information about the original seller and also allow them to cancel their purchase within three business days. This legislation was enacted in 1993 and became known as the “The Cooling-Off Rule”, codified at 15 U.S.C., Section 2302. This law has also been implemented in most states, and is known as the “Satisfaction Guaranteed Law”.

What is a Pennsylvania Reseller license?

A reseller license allows you to not pay sales tax when you purchase products on a wholesale basis with the intention of reselling them to customers.

A valid resale certificate is used to identify your company as an entity that has authorization to officially resell.

When purchasing at wholesale, customers will often ask to verify your reseller certificate so they know not to collect sales tax. A Pennsylvania reseller license is often referred to as a Pennsylvania exemption certificate.

How do I fill out a resale certificate in Pennsylvania?

Simply visit the Pennsylvania Department of Revenue and complete the resale certificate form

Why is the Pennsylvania resale certificate required?

A Pennsylvania certificate of resale is required to show that no tax is due on any sale that is made for the intention of resale.

How to get a Resale Certificate Conclusion

There you have it, detailed information about how to get a resale certificate in Pennsylvania, how to use it, and even the responsibilities you have as a certificate holder. We hope this post answers all the questions you may have, especially if you want to start a venture within the beautiful state of Pennsylvania.

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