Get a Maryland Resale Certificate
HOW TO GET A RESALE CERTIFICATE IN MARYLAND?
A Maryland resale certificate is a tax-exemption document that allows businesses to purchase goods without paying sales tax when those goods are intended for resale. This certificate ensures that sales tax is only collected at the final point of sale to consumers, preventing double taxation. Retailers, wholesalers, and manufacturers use Maryland resale certificate to buy products tax-free from suppliers, with the legal obligation to collect and remit sales tax when the items are resold.
To obtain a Maryland resale certificate, businesses must follow these three steps.
✔ STEP 1 : Complete an MD Sales & Use Tax registration
✔ STEP 2 : Fill out a resale exemption certificate form
✔ STEP 3 : Present a copy of this certificate to suppliers when you wish to purchase items for resale
WHAT IS A MARYLAND RESALE CERTIFICATE?
A Maryland resale certificate is state-issued tax exemption document that allows businesses registered with the Comptroller of Maryland to make tax-free purchases of tangible personal property or taxable services explicitly for resale, incorporation, or production as defined under the Maryland Code of Regulations 03.06.01.14. The certificate requires the purchaser’s Maryland Sales and Use Tax Registration Number, business name, address, and a signed declaration that the items purchased will be resold.
The Maryland resale certificate is also commonly known as a resale license, reseller permit, reseller license and tax exemption certificate.
This reseller certificate 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. Also, any items can be purchased using the permit assuming that the items will be resold.
WHAT IS A BLANKET RESALE CERTIFICATE IN MARYLAND?
A blanket resale certificate in Maryland is a document that allows a purchaser to make multiple tax-exempt purchases for resale from a specific vendor without providing a separate certificate for each transaction. It remains in effect until revoked and must include the buyer’s name, address, Maryland sales and use tax registration number, and a statement that the purchases are for resale.
WHAT INFORMATION IS ON A MARYLAND RESALE CERTIFICATE?
The information listed on the Maryland 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 Maryland 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 MARYLAND RESALE CERTIFICATE THE SAME AS A MARYLAND SALES TAX PERMIT?
No, a Maryland resale certificate is not the same as a Maryland sales tax permit. The Maryland 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 Maryland sales tax permit enables a company to make sales within the state and collect/remit sales tax for those sales.
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 Maryland resale certificate, you must first apply for a Maryland sales tax license. This license will provide you with a Maryland Tax ID number (sales tax number) which will be a necessary field on the Maryland resale certificate.
DO I NEED A RESALE CERTIFICATE IN MARYLAND?
Yes, you need a resale certificate in Maryland 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 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 Maryland resale certificate that is properly filled out.
WHERE TO GET A MARYLAND RESALE CERTIFICATE?
To obtain a Maryland resale certificate, you must first register for a Sales and Use Tax License. Once registered, you can issue a resale certificate by providing a document that includes your business name, address, Maryland sales and use tax registration number, and a statement that the purchase is for resale.
ARE THERE ANY REQUIREMENTS TO GET A RESELLER LICENSE IN MARYLAND?
Yes. To obtain a Maryland Sales and Use Tax License, you must have a registered business entity and provide necessary information such as your Federal Employer Identification Number (FEIN), business address, and details about your business activities. Additionally, if you are selling tangible goods, you may be required to obtain a trader’s license from the local Clerk of the Circuit Court.
HOW LONG DOES IT TAKE TO GET A RESALE CERTIFICATE IN MARYLAND?
After completing the online registration for a Sales and Use Tax License, you will receive your license number immediately. With this number, you can issue resale certificates to your suppliers right away.
WHAT IS THE VALIDITY OF A MARYLAND RESALE CERTIFICATE?
Maryland resale certificates do not have a specified expiration date. However, it is recommended that sellers update their records every three years to ensure the information remains accurate and up to date.
HOW TO VERIFY A MARYLAND RESALE CERTIFICATE?
To verify a Maryland resale certificate, you can use the Online Verification of Maryland Tax Account Numbers tool provided by the Maryland Comptroller’s Office. You will need the buyer’s Maryland sales and use tax registration number to confirm its validity.
DO RESELLERS NEED A BUSINESS LICENSE TO OPERATE IN MARYLAND?
Yes. In addition to the Sales and Use Tax License, resellers in Maryland are typically required to obtain a trader’s license from the local Clerk of the Circuit Court. The fee for this license is based on the value of the commercial inventory reported and ranges from $15 to $800, depending on the county.
HOW TO USE OR ACCEPT A MARYLAND RESALE CERTIFICATE?
To use or accept a Maryland Resale Certificate, reciprocity laws determine its acceptance across state lines. Maryland does not accept out-of-state resale certificates. Buyers must obtain a Maryland Sales and Use Tax License, which provides an eight-digit Maryland sales tax ID required for the resale certificate. The certificate must be properly completed with all necessary information, including the business name, address, and sales tax ID, to be valid.
Maryland resale certificates are valid only for in-state purchases. Suppliers must verify the certificate’s validity through Maryland’s tax verification system. The resale certificate must be signed by the buyer, and purchases must align with the intended resale purpose.. Additional verification is required if any information is incomplete or appears fraudulent. Sellers must maintain a copy of each resale certificate for audit purposes. One certificate per customer is sufficient, but subsequent purchases should be reviewed for compliance.
Using a resale certificate for non-resale purchases is prohibited. Sellers accepting fraudulent or improperly completed resale certificates may be held liable for unpaid sales tax. Maryland prohibits the use of resale certificates for purchases under $200 unless the supplier delivers directly to the buyer’s retail location. Businesses must comply with Maryland’s resale certificate requirements to avoid legal and financial penalties.