Q: Do you provide service for resale certificate?
Thank you to a business owner in Maryland for this great question! A resale certificate allows you to purchase goods without paying sales tax, as long as you intend to re-sell those goods. While Northwest doesn’t currently offer services for obtaining a resale certificate, we’re happy to help you navigate the process. Here’s everything you need to know about getting a resale certificate in Maryland:
1. Register for Maryland Sales & Use Tax
Before you can claim a tax exemption, you must first make sure your Maryland LLC or Maryland Corporation is registered with the Maryland Tax ID Bureau. This is important for all businesses with nexus in the state of Maryland.
What does it mean to have nexus in Maryland?
In a business sense, to have nexus essentially means to have a connection to a particular place. According to the Maryland Tax ID Bureau, your business has nexus if:
- Your business operations are primarily conducted in Maryland (even if online)
- Ownership or staff members conduct business in Maryland (including contractors or agents)
- You intend to hire contractors or employees in Maryland
- You store items in a warehouse in Maryland
- Your business is located elsewhere, but sells taxable items in Maryland
- You sell products to be shipped within Maryland
- You sell products for resale in Maryland
How do I register for Maryland Sales & Use Tax?
You can register your business with the Maryland Tax ID Bureau by completing the state’s Combined Registration Application. You may submit your application online or by mail.
Online: State Sales Tax Registration
By Mail:
Comptroller of Maryland
Revenue Administration Center
110 Carroll Street
Annapolis, Maryland 21411-0001
2. Complete a Resale Exemption Certificate Form
Once you have your Maryland Tax Registration Number, obtaining a Resale Certificate is as simple as filling out this Resale Exemption Certificate Form. You’ll be required to fill in the following information for each transaction:
- Business name of seller
- Business name of buyer
- Business address of buyer
- Signature of buyer
- Maryland Sales & Use Tax Registration Number of buyer
Does it cost anything to get a Resale Certificate in Maryland?
Nope. Both registering your business for sales tax and obtaining a Resale Certificate are free.
Do I need a Maryland Resale Certificate to purchase goods I intend to resell?
Technically, no. However, having a Resale Certificate allows you to avoid paying taxes on goods you intend to resell, which ultimately prevents what’s called “double taxation.” Double taxation is when a product gets taxed twice before consumption.
For example, let’s say a supplier sells you a box of t-shirts and collects sales tax on that transaction, then you sell one of those t-shirts to a customer and collect sales tax on that purchase. In that scenario, the t-shirt is taxed twice. With a resale certificate, all of those t-shirts will only get taxed once—when you sell them.
3. Present your Resale Certificate to supplier
When purchasing goods for resale, you should submit a completed Resale Exemption Certificate Form to the business you’re purchasing from. For more information, see the Maryland Resale Certificate page.