A reseller permit, also known as a resale certificate, reseller license, or tax exemption certificate, is a document that allows a business to purchase goods from a supplier without paying sales tax on them, as long as the goods are intended to be resold. The permit is used as evidence that the seller does not need to collect sales tax on that transaction and should be retained in the sellers books and records for four years.
In Texas, a resale license is called a "sales and use tax permit," and any individual or enterprise selling or leasing tangible personal property or services within the state must have one. Some taxable services also require a resale license to perform their services on the tangible personal property in a businesss resale inventory, such as insurance, data processing, internet access, telecommunications, and utility transmission and distribution.
To obtain a reseller permit, a business must apply to the appropriate state department, organize the necessary information and documents, and submit the fee for obtaining the certificate. The permit typically contains the names and addresses of the seller and the buyer, a general description of the items being sold, and the buyers Texas sales tax permit number.
It is important to note that a reseller permit should not be used if there is any question whether the property will be resold, and the buyer should always ensure that the resale certificate is completely and accurately filled out before accepting it. Additionally, a Texas sales tax permit is not the same as a Texas resale certificate, as the former allows a company to make sales inside a state and collect/remit sales tax for those sales, while the latter allows a buyer to purchase goods from a supplier without having to pay sales tax on the goods that would otherwise be taxable.
