How to get a Resale Certificate in Idaho [2023 Guide]

When a business purchases inventory to resell, they can do so without paying sales tax.  In order to do so, the retailer will need to provide an Idaho Sales Tax Resale Certificate to their vendor. 

Learn more about what a resale certificate is, how to get one, and more.

What is a Resale Certificate?

When 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 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 Idaho State Tax Commission. 

For instance, when a farming supply store in Idaho purchases items like seeds, fertilizer, or farming tools from a wholesaler to sell in their store, by having a resale certificate, the store owner won’t pay sales tax on these transactions. When a home gardener purchases these supplies, the retailer will charge sales tax to the customer based on the full price of the items.

Throughout the course of the business, the farming supply store will accumulate sales tax from all their transactions with customers. Periodically, typically at the end of the month, the store owner will collect all the sales tax that has been charged to the customers and send it to the state of Idaho. 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, resale 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 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.

Getting Started

Before a business starts selling products or providing taxable services, it must first get an Idaho Seller’s Permit from the Idaho State Tax Commission. The Seller’s Permit is sometimes referred to as a seller’s permit, sales tax number, or sales tax license.

Filling out the Idaho Sales Tax Resale Certificate

The Idaho State Tax Commission created the Sales Tax Resale or Exemption Certificate (Form ST-101) to document tax-free transactions.

Filling out the Idaho Sales Tax Resale or Exemption Certificate (Form ST-101) is pretty straightforward but is critical for the seller to gather all the information.

If audited, the Idaho State Tax Commission requires the seller to have a correctly filled out ST-101 Sales Tax Resale Certificate.  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.   

Idaho Resale Certificate FAQs