District of Columbia Resale Certificate | OTR-368
HOW TO GET A DISTRICT OF COLUMBIA RESALE CERTIFICATE?
A District of Columbia resale certificate is a tax exemption document that allows registered businesses to purchase goods without paying sales tax when those goods are intended for resale. This certificate serves as a formal acknowledgment between buyers and vendors that the purchased goods will be resold, shifting the responsibility of tax collection to the seller at the point of final sale. The certificate must be obtained through the Office of Tax and Revenue and renewed annually to maintain validity.
To obtain a Washington state resale certificate, businesses must follow these three steps.
✔ STEP 1 : Obtain a District of Columbia Sales Tax License
✔ STEP 2 : Fill out the DC OTR-368 Tax Exemption Certificate form
✔ STEP 3 : Present a copy of this certificate to suppliers when you wish to purchase items for resale
WHAT IS A DISTRICT OF COLUMBIA RESALE CERTIFICATE?
A District of Columbia resale certificate is a legally recognized tax exemption document issued by the DC Office of Tax and Revenue (OTR). It allows registered businesses with a valid DC Sales and Use Tax Permit to purchase tangible personal property or taxable services without paying sales tax when those items are intended for resale, rental, or incorporation into other taxable goods. Governed by Rule 9-414 of the DC Municipal Regulations, the resale certificate shifts tax liability to the final retail transaction, requiring the purchasing business to collect and remit sales tax when selling to end consumers. Vendors must verify, document, and retain certificates for compliance, and misuse can result in penalties or tax liability.
Resale certificates are valid for one year and must be renewed through MyTax.DC.gov to remain effective.
It allows suppliers to know that you are legally allowed to purchase the goods without them having to charge you sales tax, since you will be reselling the goods and collecting sales tax from the consumer (end user). There is no limitation on where a reseller permit can be used as long as the seller accepts it. Any items can be purchased using the permit assuming that the items will be resold.
WHAT INFORMATION IS ON INCLUDED A DISTRICT OF COLUMBIA RESALE CERTIFICATE?
Common details listed on the District of Columbia resale certificate include the name (company or individual) and address of the buyer, a descriptive detail of the goods being purchased, a reference that this merchandise is intended to be resold and the accurate District of Columbia sales tax number. It is important that you follow the correct procedure and protocol involved in the resale certificate process. Any errors occurring during this process could cause delays or penalties to be incurred by either party.
IS A DISTRICT OF COLUMBIA RESALE CERTIFICATE THE SAME AS A DISTRICT OF COLUMBIA SALES TAX PERMIT?
No, a District of Columbia resale certificate is not the same as a District of Columbia sales tax permit. The District of Columbia resale certificate allows a buyer (such as a retailer) to purchase goods from a supplier (such as a wholesaler) without paying sales tax on taxable goods. The District of Columbia sales tax permit allows a company to make sales inside the state and collect and remit sales tax for those sales.
A District of Columbia sales tax permit is not the same as a District of Columbia resale certificate. The former allows a company to make sales inside a state and collect/remit sales tax for those sales. Conversely, a resale certificate allows a buyer (such as a retailer) to purchase goods from a supplier (such as a wholesaler) without having to pay sales tax on the goods that would otherwise be taxable.
It is the responsibility of the supplier to keep a copy of the resale certificate for compliance purposes and the responsibility of the retailer to collect sales tax when the goods are sold.
In order to have a District of Columbia resale certificate, you must first apply for a District of Columbia sales tax permit. This sales permit will provide you with a District of Columbia Tax ID number (sales tax number) which will be a necessary field on the District of Columbia resale certificate.
DO I NEED A RESALE CERTIFICATE IN DISTRICT OF COLUMBIA?
Yes, you need a resale certificate in the District of Columbia, If your business is a retail or wholesale operation that does not want to be responsible for collecting sales tax on resold items and does not want to have any exposure to any future tax liability.Since sales tax is only supposed to be paid one time on a taxable good or service, then you want to make sure you are compliant at your phase of the product’s sales life. Even though sales tax is usually paid by the end user, the only way to ensure this is with a District of Columbia resale certificate that is properly filled out.
IS A RESALE CERTIFICATE THE SAME AS A BUSINESS LICENSE IN THE DISTRICT OF COLUMBIA?
No, a resale certificate and a business license are distinct documents in the District of Columbia.
A resale certificate (Form OTR-368) allows businesses to purchase goods tax-free for resale purposes. To obtain one, businesses must first register for a sales tax account by filing Form FR-500 with the Office of Tax and Revenue (OTR).
A business license, specifically the Basic Business License (BBL), is issued by the Department of Licensing and Consumer Protection (DLCP) and authorizes a business to operate within the District. The BBL is required for various business activities and is separate from tax-related registrations.
HOW LONG IS A RESALE CERTIFICATE GOOD FOR IN THE DISTRICT OF COLUMBIA?
A District of Columbia resale certificate is valid for two years from the date of issuance. Businesses must renew their certificate before it expires to maintain the ability to make tax-exempt purchases for resale.
HOW CAN I LOOK UP A RESALE CERTIFICATE NUMBER IN THE DISTRICT OF COLUMBIA?
To verify a resale certificate number in the District of Columbia, you can use the MyTax.DC.gov portal. This online platform allows users to confirm the validity of a business’s sales and use tax registration, which is associated with the resale certificate.
HOW TO USE OR ACCEPT A DISTRICT OF COLUMBIA RESALE CERTIFICATE
To use or accept a District of Columbia resale certificate, businesses must follow legal requirements established by the Office of Tax and Revenue. A resale certificate (Form OTR-368) allows businesses to buy taxable goods without paying sales tax if those goods are intended for resale.
DC does not accept out-of-state resale certificates, meaning businesses purchasing tax-exempt goods in DC must register for a local sales tax permit. Purchases must strictly qualify for resale, such as tangible personal property or taxable services that will be resold in the same form, incorporated into another taxable product, or used as part of taxable services. Vendors must verify certificates using the MyTax.DC.gov online system to confirm the buyer’s registration status, ensure certificates are completed accurately, and maintain them as proof for tax-exempt sales.
If a vendor accepts an invalid or improperly used certificate, they may be held liable for unpaid sales tax. Blanket resale certificates may be used for recurring transactions but must also be renewed annually. Vendors must refuse certificates for purchases that do not qualify for exemption, and if a buyer misuses a resale certificate for non-resale items, they must either pay sales tax or file a use tax return.