A Florida Resale Certificate is a document that allows a business to purchase goods and services tax-free from suppliers for the purpose of reselling them. In order to use one, the retailer must provide a Florida Resale Certificate to their vendor.
Learn more about what a resale certificate is, how to get one, and more.
Table of ContentsWhen retailers purchase products to resell, they often don’t pay sales tax to the supplier on the purchase. The sales tax will still be paid, but instead of the retailer paying sales tax, the retailer charges sales tax to their customer on the final value of the merchandise.
For instance, when a restaurant in Florida purchases ingredients and food supplies from a wholesaler to prepare meals for their customers, by having a resale certificate, the restaurant owner usually won’t pay sales tax on the purchase of these supplies. When a customer orders a meal in the restaurant, the establishment will charge sales tax to the customer based on the full price of the meal. Then, typically every month, the restaurant owner will take all of the sales tax money that was collected and send it to the Florida Department of Revenue.
It’s worth mentioning that the sales tax exemption is only intended to be used for tangible personal property that will be resold and not intended for the tax-free purchase of items used in normal business operations, such as paper, pens, etc.
Before a business starts selling products or providing taxable services, it must first get a Florida Seller’s Permit (sometimes referred to as a Sales Tax Permit or State Tax ID) from the Florida Department of Revenue. After registering for the permit, the Florida Department of Revenue issues a Florida Certificate of Registration (Form DR-11) and Florida Annual Resale Certificate for Sales Tax (Form DR-13) that will be provided to the vendor.
Online registration is free, however, there is a $5 fee to register by mail.
Florida Resale Certificates expire each year on December 31. Active businesses will have their certificate automatically reissued by the Florida Department of Revenue.
Most new businesses are set up to file and pay sales and use tax monthly, but depending on the amount of tax collected, your business may qualify for a different filing frequency.
The Seller’s Permit and Resale Certificate are commonly thought of as the same thing but they are actually two separate documents. The Seller’s Permit allows a business to sell and collect sales tax from taxable products and services in the state, while the Resale Certificate allows the retailer to make tax-exempt purchases for products they intend to resell.
Also, in addition to these, your business may need to register for additional items. For more information, check out our guide to Florida business licenses.
When a business is presented with a resale certificate, the burden of proof is on the seller dealer to verify that the buyer’s information is correct and to keep these records. Failing to verify this information may put the liability of paying Florida sales taxes on the seller.
Before accepting a resale certificate, a seller should:
Obtain a copy of the buyer’s Annual Resale Certificate. There are three methods to obtain a certificate.
Method 1: Have the buyer send a paper or electronic copy. The seller should retain a copy of this certificate for three years. The resale certificate should be kept on file by both the buyer and seller and is not filed with the state.
Method 2: For each sale, obtain a transaction authorization number using the buyer’s certificate number. A copy of the certificate isn’t needed when the authorization number is recorded with the invoice. To get the authorization number, either dial 877-357-3725, visit the Florida Department of Revenue’s verification page or use the FL Tax mobile app.
Method 3: Each calendar year, the seller can obtain annual vendor authorization numbers for regular customers who qualify to purchase tax-free. Visit the Certificate Verification page and upload a batch file for customer certificate verification.
Sellers are also responsible for examining the certificate and evaluating whether the goods sold are reasonably consistent with the purchaser’s line of business. For example, if the buyer’s business is a car dealership but they want to purchase office supplies tax-free, the seller may want to investigate further.