How to get a Sales Tax Certificate of Exemption in Georgia

A Georgia Sales Tax Exemption Certificate is a document that allows a business to purchase goods and services tax-free from suppliers for the purpose of reselling those goods and services. The certificate is also sometimes referred to as a “seller’s permit,” “resale permit,” or a “reseller permit.”

Learn more about the Certificate of Exemption, how to get one, and more.

What is a Sales Tax Certificate of Exemption?

When retailers purchase products to resell, the small business owner don’t often pay sales tax to the supplier on the purchase. The sales tax will still be paid, but instead of the retailer paying the state sales tax, the retailer charges sales tax to their customer on the final value of the merchandise. The collected sales tax is then sent by the retailer to the Georgia Department of Revenue.

For instance, when a bookstore in Georgia purchases books from a distributor to sell in their store, by having a resale certificate, the bookstore owner won’t pay sales tax on this transaction. When a customer purchases a book, the retailer will charge sales tax to the customer based on the full price of the book.

Throughout the day, the bookstore will accumulate sales tax from all their transactions with customers. Periodically, typically at the end of the month, the bookstore owner will collect all the sales tax that has been charged to the customers and send it to the state of Georgia. In this way, the sales tax is effectively paid by the final consumer, not by the businesses involved in the supply chain.

The purpose of the certificate is to provide evidence of why sales tax was not collected on a transaction. Similar names for a resale certificate include reseller number, seller’s permit, exemption certificate, wholesale license, or reseller’s license. In order for the supplier to allow the tax-exempt purchase, the seller needs proof the buyer intends to resell the product by providing a valid resale certificate.

The sales tax exemption is only intended to be used for inventory that will be resold and not intended for the tax-free purchase of items used in normal business operations such as paper, pens, etc.

Getting Started

Before a business starts selling products or providing taxable services, it must first get a Georgia Sales Tax Number from the Georgia Department of Revenue. The sales tax number is sometimes referred to as a seller’s permit, sales tax permit, or sales tax license.

Steps for filling out the ST-5 Georgia Sales Tax Certificate of Exemption

The Georgia Department of Revenue created a Sales Tax Certificate of Exemption (Form ST-5) to make things easier for documenting tax-free transactions. 

Filling out the ST-5 is pretty straightforward but it is critical for the seller to gather all the information.

If audited, the Georgia Department of Revenue requires the seller to have a correctly filled out ST-5 Sales Tax Certificate of Exemption.  Without it correctly filled out, the seller could end up owing sales taxes that should have been collected from the buyer in addition to penalties and interest. 

Step 1: Download Form ST-5

Begin by downloading the Georgia Sales Tax Certificate of Exemption Form ST-5 

Step 2: Certify the exemption being claimed

Certify the type of exemption being claimed (Most resellers are going to select the first checkbox (Purchases or leases of tangible personal property or services for resale only under O.C.G.A. § 48-8-30)

Step 3: Identify the seller’s information

Fill out the seller’s name and address.

Step 4: Identify the buyer’s information

The information needed from the buyer includes:

– Business Name (Refers to the legal name of the business)
– Sales tax number
– Type of business
– Address
– Printed name and signature
– Title
– Telephone number
– Email

Georgia Sales Tax Certificate of Exemption FAQs