How to get and use a Florida resale certificate

In Florida, you get an annual resale certificate by registering with the Department of Revenue to collect sales tax. Once registered, you can buy goods you plan to resell without paying sales tax on them, by giving your supplier a copy of the certificate. The certificate expires every December 31, and a new one is issued each year as long as you stay registered.

This guide follows the Florida Department of Revenue's annual resale certificate page. It is a guide, not tax advice. Confirm how it applies to your business with your accountant or the Department.

Who gets one

Businesses registered with the Department to collect sales tax are issued the certificate. It lets owners or their representatives buy or rent property or services tax-free when the items will be resold or re-rented. Businesses registered only to remit use tax do not receive one.

How to get yours

1. Register to collect sales tax with the Florida Department of Revenue.
2. Download and print the next year's certificate. Each November, the following year's certificates are posted online. Print yours from the Department's Print Annual Resale Certificate page, using your tax account information.
3. Paper filers. If you file paper sales and use tax returns, the certificate comes by mail with your coupon book or return.
4. New locations. The Department says certificates issued to new locations from mid-October run from issuance through the following calendar year.

The page does not state a fee for the certificate.

How to use it

Give your supplier a copy when you buy items or services to resell or re-rent. Items that become a component of a product you sell qualify too.

According to the Department:

• Signatures are no longer required. Presenting the certificate certifies the items will be resold or rented.
• Regular buyers generally don't have to present it on every purchase, though some sellers have internal rules requiring it.
• The address on the certificate doesn't have to match your location, but the business name must be correct and the certificate must be current.
• A certificate showing only the owner's name, with no d/b/a, is acceptable.

What you can't buy tax-free with it

Don't use it for items you use in your business, for personal use, or for items you use before resale. Furniture, office equipment, computers and supplies are the Department's examples. A Miami electronics reseller, for example, could buy inventory for resale this way but not the laptop used in the office.

If you buy tax-free for resale and then use the item yourself, you report and pay use tax at the sales tax rate on your sales and use tax return.

Usage-based exemptions, such as fertilizer for agricultural use, need an exemption certificate, not a resale certificate.

What your suppliers have to do

Sellers must document each tax-exempt resale sale using one of three methods, and may use a different method for each sale:

1. Keep a paper or electronic copy of your certificate for three years.
2. Get a transaction authorization number for each sale by phone, online through Seller Certificate Verification or through the FL Tax mobile app. The number works for that purchase only.
3. Get annual vendor authorization numbers for regular customers by uploading a batch file.

This is why a supplier may ask you for the certificate even if they've sold to you before. It is also a good reason to keep a current copy on file with your regular vendors.

Keep it clean

• Print the new certificate each November and send it to your regular suppliers before January.
• Keep copies of what you gave each supplier.
• Track which purchases were tax-free so you can spot items that ended up used in the business and need use tax.
• Keep your records organized. Your accountant will ask for them.

The Department warns that there are criminal and civil penalties for fraudulent use of a resale certificate.

Exporters and out-of-state sellers

If you sell mostly to buyers outside the U.S., or you're an out-of-state dealer without a Florida certificate, your position may differ. The Department's FAQ points out-of-state dealers to Rule 12A-1.0015(3), F.A.C. Ask your accountant how it applies to you.

FAQ

Does the certificate cost anything? The Department's page doesn't state a cost. Check the Department if you're unsure.

Do I need to show it every time I buy from the same supplier? Generally not, according to the Department, though some businesses have rules that require it.

What if I buy something tax-free and don't resell it? You report and pay use tax at the sales tax rate on your sales and use tax return.

Next step

For paying suppliers and tracking inventory spend, see the Shield business credit card, which syncs with QuickBooks, and Shield business accounts.