What is a Texas Resale Certificate and When do Texas Sellers Need One?
Wondering what a Texas resale certificate is and whether you’ll need one? If you plan to sell goods or services in the Lone Star State as a business, these are questions you’ll need to answer.
Especially if you’re a new business owner, you may be unsure of how to proceed when it comes to resale certificates. As a business owner in Texas, you’ll need to fill out some paperwork to stay in compliance regarding these certificates.
Before you do that, however, you may have some questions about resale certificates. Let’s look at a basic definition of what they are.
What is a Texas Resale Certificate?
A resale certificate allows business owners to purchase goods from wholesalers without having to pay tax. This prevents the item from being taxed twice. The Texas state government then expects business owners to charge the sales tax to their customers upon resale.
This certificate is shown to the wholesaler by business owners when purchasing items from them. Without this document, the wholesaler would be obligated to charge tax on the purchased items.
How Do You Get a Resale Certificate in Texas?
A resale certificate is very simple to obtain. You can go on to the Texas state government website and find the form. You’ll also find plenty of other helpful forms that may apply to your unique situation.
Once you find the form, you’ll need to provide basic information about the items you purchase and sell. You’ll also be required to provide info about the wholesalers you work with.
How Do You Submit a Resale Certificate?
Every time you purchase goods from your wholesaler you plan to resell, you’ll be required to submit a resale certificate. It’s important to be prepared since your seller can’t legally sell their goods to you tax-free without this certificate.
The original certificate should be given to the seller when purchasing goods from them. It should already be filled out ahead of time.
Having to provide a new certificate every time you buy from your wholesaler could be time-consuming if you regularly buy from them. Your vendors are legally able to receive a blanket resale certificate from you. This certificate communicates that all purchased items going forward plan to be resold.
The Importance of Compliance to Texas Tax Laws
Especially as a new business owner, navigating Texas tax laws can be daunting. Over time, you can better decide which details you should take care of yourself and which ones to outsource to a tax professional.
Obeying local tax laws helps to keep your business running smoothly, legally and profitably. And in the case of a Texas resale certificate, it also keeps business running smoothly and legally for your valuable wholesalers.
