Get a North Dakota Resale Certificate
HOW TO GET A NORTH DAKOTA RESALE CERTIFICATE?
A North Dakota Resale Certificate allows businesses to purchase goods tax-free when those goods are intended for resale to customers. By using reseller certificates, businesses shift the responsibility of sales tax collection to the point of final sale, preventing double taxation. This document, issued by a business with a valid North Dakota sales tax permit, is presented to suppliers to exempt qualifying purchases from sales tax.
To obtain a North Dakota Resale Certificate, businesses must follow these three steps.
✔ STEP 1 : Obtain a North Dakota Sales Tax Permit
✔ STEP 2 : Fill out the North Dakota resale certificate form
✔ STEP 3 : Present a copy of this certificate to suppliers when you wish to purchase items for resale
WHAT IS A NORTH DAKOTA RESALE CERTIFICATE?
A North Dakota Resale Certificate is a tax-exemption document that authorizes registered businesses holding a North Dakota Sales & Use Tax Permit to make tax-free purchases of tangible personal property intended for resale, lease, or rental in the ordinary course of business. North Dakota Administrative Code 81-04.1-01-15 governs the resale certificate. The certificate shifts the sales tax collection obligation to the reseller. The reseller must collect and remit North Dakota sales tax upon final sale. Proper use requires the buyer’s business details, tax ID number, vendor information, and signed certification. Record-keeping obligations impose compliance and audit requirements on buyers and sellers.
The North Dakota Resale Certificate is also commonly known as a resale license, reseller permit, reseller license and tax exemption certificate.
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. Also, any items can be purchased using the permit assuming that the items will be resold.
WHAT INFORMATION IS INCLUDED ON A NORTH DAKOTA RESALE CERTIFICATE?
Common details listed on the North Dakota 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 North Dakota 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 NORTH DAKOTA RESALE CERTIFICATE THE SAME AS A NORTH DAKOTA SALES TAX PERMIT?
A North Dakota Resale Certificate is not the same as a North Dakota Sales Tax Permit. The North Dakota Resale Certificate allows a buyer, such as a retailer, to purchase goods from a supplier, such as a wholesaler, without paying sales tax on goods that would otherwise be taxable. The North Dakota Sales Tax Permit, on the other hand, allows a company to make sales within the state and collect and 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 North Dakota resale certificate, you must first apply for a North Dakota sales and use tax registration. This permit will provide you with a North Dakota Tax ID number (sales tax number) which will be a necessary field on the North Dakota resale certificate.
DO I NEED A RESALE CERTIFICATE IN NORTH DAKOTA?
Yes, you need a North Dakota resale certificate if your business is a retail or wholesale operation that does not want to be responsible for paying sales tax on goods intended for resale and wants to avoid any future tax liability exposure.
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 North Dakota resale certificate that is properly filled out.
WHERE CAN I GET A NORTH DAKOTA RESALE CERTIFICATE?
To obtain a North Dakota resale certificate, you must first apply for a North Dakota Sales and Use Tax Permit. Once registered, you can complete Form SFN 21950, the Certificate of Resale, which allows you to make tax-exempt purchases for resale purposes.
WHERE IS MY NORTH DAKOTA RESALE NUMBER LOCATED?
Your North Dakota resale number, also known as the Sales and Use Tax Permit Number, is issued upon approval of your sales tax permit application. This number is required when completing the Certificate of Resale and should be included in the appropriate section of Form SFN 21950.
DOES NORTH DAKOTA ACCEPT OUT-OF-STATE RESALE CERTIFICATES?
Yes, North Dakota accepts out-of-state resale certificates, provided they are properly completed and comply with North Dakota’s requirements. Acceptable forms include the Multistate Tax Commission’s Uniform Sales and Use Tax Certificate and the Streamlined Sales and Use Tax Agreement Certificate of Exemption. However, it is advisable to confirm acceptance with the specific seller, as they have the discretion to accept or reject out-of-state certificates.
DO NORTH DAKOTA RESALE CERTIFICATES EXPIRE?
North Dakota resale certificates do not have a specified expiration date. However, it is recommended that businesses periodically review and update their resale certificates to ensure the information remains accurate and up to date.
HOW TO USE OR ACCEPT A NORTH DAKOTA RESALE CERTIFICATE?
To use a North Dakota resale certificate, a retailer must provide it to suppliers when making tax-exempt purchases for resale. The certificate must include the business name, address, North Dakota Tax ID number, and a description of the goods being purchased. Retailers can only use the certificate for purchases intended for resale and must provide an updated certificate if business information changes. Vendors keep the certificate on file for ongoing transactions. North Dakota resale certificates do not expire unless revoked.
To accept a North Dakota resale certificate, vendors must verify it is properly completed, signed, and valid. Vendors must keep copies for audits and check validity online using the North Dakota Taxpayer Access Point. North Dakota does not accept out-of-state resale certificates unless covered under a valid reciprocity agreement. Vendors cannot accept resale certificates from non-reciprocating states.
Retailers without a resale certificate must pay sales tax on inventory purchases but can claim a credit for sales tax paid on goods resold when filing their North Dakota sales tax return. Businesses with an active resale certificate cannot claim this credit and must request a refund from the North Dakota Office of State Tax Commissioner if they paid sales tax in error. The resale certificate must be valid and unexpired at the time of use. Vendors must verify the legitimacy of any resale certificate presented. All states provide a way to check resale certificate validity.
Misuse of a resale certificate violates North Dakota tax law. Vendors accepting invalid or fraudulent certificates are liable for unpaid sales tax. The certificate must be canceled if the business closes.