Florida Dept. of Revenue - Annual Resale Certificate for Sales Tax

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Annual Resale Certificate for Sales Tax

Businesses that register with the Florida Department of Revenue to collect sales tax are issued a Florida Annual Resale Certificate for Sales Tax (Annual Resale Certificate). The certificate allows business owners, or their representatives, to buy or rent property or services tax free when the property or service is resold or re-rented.

Examples of purchases or rentals that you may make without paying sales and use tax include:

Items that become a component part of a product you sell, such as nails, fabric, and wood that are incorporated into a chair,
Items resold as tangible personal property,
Services that will be resold as part of your regular business operations, or
Rentals that will be rented as real property or tangible personal property.

You may not use your Annual Resale Certificate to make tax-exempt purchases or rentals of property or services that will be used:

But not resold or rented,
Before selling or renting the goods, or
By your business or for personal purposes, such as furniture, office equipment, computers, or supplies.

If you purchase an item tax exempt intending to resell it, but then use the item in your business or for personal use, you must report and pay use tax on the item. Use tax is calculated at the same rate as sales tax. Report use tax on your sales and use tax return.

There are criminal and civil penalties for the fraudulent use of a resale certificate.

Examples of Items for Resale and Items Bought for Use

Type of Business	Purchases that May Qualify for the Resale Exemption	Purchases that are Generally Taxable
Restaurants; Bars	Disposable food containers, paper napkins, plastic eating utensils, and beverages	Dishes, flatware, kitchen utensils, cleaning supplies, office equipment, office supplies, delivery vehicles, kitchen equipment, credit card machines, and menus
Barber Shops; Beauty Salons	Items for resale to customers for off-premises use, including shampoo, hair tonics, brushes, and cosmetics	Items used in serving customers on-site, including shampoo, brushes, cosmetics, cleaning supplies, hair dryers, curling irons, beautician chairs, scissors, combs, shears, office supplies, and office equipment
Car Dealers; Auto Repair Shops; Service Stations	Tires, batteries, auto parts, seat covers, auto paint, antifreeze, nuts, bolts, and oil available for resale to customers or incorporated into repairs	Hand and power tools, machinery, tape, sandpaper, lubricants, solvents, rags, cleaning supplies, office supplies and equipment, free loaner vehicles, delivery vehicles, wreckers, lifts, and diagnostic equipment
Florists; Plant Nurseries; Landscape Gardeners	Fertilizers, flowers, shrubs, potting soil, and garden tools for resale to customers on an itemized invoice	Hoses, garden tools, lawn mowers, rakes, office equipment, supplies used in day-to-day operations, and delivery vehicles
Convenience Stores	Soft drinks, candy, beer, t-shirts, hats, kitchen supplies, office supplies, household supplies, cleaning supplies, and motor oil available for resale to customers	Cash registers, business equipment, cleaning supplies, office supplies, gas pumps, credit card machines, and ATMs
Pet Shops	Items intended for resale rather than use in business operations, including pet food, pet litter, brushes, and pet dishes	Items for use in day-to-day store operations, including pet food, pet litter, pet dishes, cleaning supplies, office supplies, and office equipment
Service Providers Examples: Attorneys Accountants Architects Doctors Dentists Daycare Centers	None. These types of businesses are generally considered to be the end users of products they use in providing service to customers and generally do not qualify for the resale exemption.	Electronics, service vehicles, appliances, office equipment and supplies, books, stationery, computer hardware or software, bandages, mouthwash, toothbrushes, toys, and bedding

Making Purchases with Your Annual Resale Certificate

You may provide a copy of your current Annual Resale Certificate to the seller when you buy or rent property or services that you intend to resell or rent as part of your business. The seller may also document the tax-exempt sale using another method available to sellers.

Making Sales for Resale to Other Businesses

As a seller you must document each tax-exempt sale for resale using one of the following methods. You may select a different method to document each sale for resale.

Method 1 – Obtain a copy of your customer's current Annual Resale Certificate. You can accept paper or electronic copies. Maintain copies of the certificates (paper or electronic) for three years.

Method 2 – For each sale, obtain a transaction authorization number using your customer's Annual Resale Certificate number. You do not need to maintain a copy of your customer's Annual Resale Certificate number when you maintain a transaction authorization number for a tax-exempt sale for resale.

Phone: 877-FL-RESALE (877-357-3725) and enter the customer's Annual Resale Certificate number.

Online: Go to the Seller Certificate Verification application and enter the required seller information for verification.

Mobile: You can also use the FL Tax mobile app available for iPhone, iPad, Android devices, and Windows Phones.

Keep a record of all verification response reports to document your tax-exempt sales.

The telephone system, the online system, and the mobile app will each issue a transaction authorization number or alert the seller that the purchaser does not have a valid resale certificate. The transaction authorization number is valid for that purchase only, and is not valid for other resale purchases made by the same purchaser. As a seller, you must get a new transaction authorization number for each resale transaction.

Method 3 – Each calendar year, obtain annual vendor authorization numbers for your regular customers.

Online: Go to the Seller Certificate Verification website and enter the required seller information. Then upload a batch file for customer certificate verification and retrieve and save that file 24 hours after submission.

You do not need to maintain a copy of your customer's Annual Resale Certificate when you maintain a vendor transaction authorization number each calendar year for that customer.

Annual Resale Certificates Expire on December 31

As long as you continue to conduct business in Florida and are registered to collect sales tax, you will be issued a new Annual Resale Certificate each year. Certificates issued to new business locations beginning in mid-October will be effective from the date they are issued through the following calendar year.

Annual Resale Certificates Available Online

Each November, Annual Resale Certificates for the following calendar year will be available on the Department's website. If you file paper sales and use tax returns, your certificate will be mailed to you with your annual coupon book or your paper return. Using your tax account information, you may download and print your certificate. Go to the Print Annual Resale Certificates webpage and follow the instructions.

Frequently Asked Questions

Making Purchases with the Annual Resale Certificate

Question:Do I have to sign my Annual Resale Certificate?

No. Signatures are no longer required. When you present your Annual Resale Certificate to make tax-exempt purchases, you are certifying that the items or services purchased will be resold or rented.

Question:If I buy from a vendor on a regular basis, do I have to present a copy of my Annual Resale Certificate each time I make a purchase?

No. However, some businesses have internal procedures requiring you to present your certificate each time you make a purchase for resale.

Question:If I have a use tax number, will I receive an Annual Resale Certificate?

No. If you are registered to remit use tax you will not receive an Annual Resale Certificate because you cannot make tax-exempt purchases for resale.

Accepting an Annual Resale Certificate from Another Business

Question:Do I need to circle one of the bulleted options on the Annual Resale Certificate to validate the certificate?

No. The business representative who presents the Annual Resale Certificate when buying items for resale does not need to show the purpose of the transaction. The bullets listed on the certificate simply provide examples of valid types of resale transactions.

Question:Does the address on the Annual Resale Certificate have to match the address of the customer buying the merchandise?

No. The address on the certificate does not need to match the location address of the purchaser. However, the certificate must have the proper business name and the certificate must be current.

Question:Can a selling dealer accept an Annual Resale Certificate that has only the owner's name on it and not the d/b/a name?

Yes.

Question:When an on-account customer (a customer with an open credit account) is required to pay by cash or credit card (ceases to be an on-account customer) for a short time during a year and then resumes being an on-account customer, does the selling dealer (a wholesaler) need to get another copy of the Annual Resale Certificate?

No. The initial copy of the certificate is sufficient. The selling dealer can continue to sell to this customer tax-exempt for resale on either a charge account or cash on delivery basis.

Tax Exempt Items

Question:Are vendors who sell items that are tax-exempt required to get an Annual Resale Certificate from their purchasers?

No. A vendor does not have to get a certificate from the purchaser for sales of items specifically exempt by law. However, the invoice should identify the exempt items.

Question:If an item is tax exempt because of its usage (e.g., fertilizer bought for agricultural use), is the purchaser required to submit a copy of his or her Annual Resale Certificate?

No. If the item is tax exempt under a specific exemption based on its usage and is not for resale, the purchaser should give the seller an exemption certificate. Please see the Suggested Format for an Exemption Certificate Based on Property's Use (Form DR-97 PDF Icon ).

Other

Question:What documentation is required to exempt sales when the purchaser is an out-of-state dealer who does not have a Florida Annual Resale Certificate for Sales Tax?

Please refer to Rule 12A-1.0015(3), Florida Administrative Code, for information regarding sales to nonresident dealers.