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How to get a Kansas Resale Certificate (Resale Exemption Certificate)

How to get a Kansas Resale Certificate (Resale Exemption Certificate)

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How to get a Kansas Resale Certificate (Resale Exemption Certificate)

How to get a Kansas Resale Certificate (Resale Exemption Certificate)

A Kansas Resale 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 “resale permit” or a “reseller’s permit.”

Learn more about what a Resale Exemption Certificate is, how to get one, and more.

What is a Resale Exemption 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 Kansas Department of Revenue.

For instance, when a grocery store in Kansas purchases goods like produce, canned goods, or baking supplies from a distributor to sell in their store, by having a resale certificate, the grocery store owner won’t pay sales tax on these transactions. When a customer purchases groceries, the retailer will charge sales tax to the customer based on the full price of the items.

Throughout the course of the business day, the grocery store will accumulate sales tax from all their transactions with customers. Periodically, typically at the end of the month, the grocery store owner will collect all the sales tax that has been charged to the customers and send it to the state of Kansas. In this way, the sales tax is effectively paid by the final consumer.

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 Kansas Sales Tax Registration Number from the Kansas Department of Revenue. The Sales Tax Permit is sometimes referred to as a seller’s permit, sales tax number, or sales tax license.

Is a Resale Exemption Certificate the same as a Sales Tax Permit?

The Sales Tax Permit and Resale Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Sales Tax 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.

Related: How to get a Kansas Business Tax Number

The Business Tax Number should be listed on the Resale Exemption Certificate.

How to fill out the Kansas Resale Exemption Certificate

Filling out the Kansas Resale Exemption Certificate (Form ST-28A) is pretty straightforward but is critical for the seller to gather all the information.

If audited, the Kansas Department of Revenue requires the seller to have a correctly filled out ST-28A Resale Exemption 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.  

Steps for filling out the ST-28A Kansas Resale Exemption Certificate

Step 1 – Begin by downloading the Kansas Resale Exemption Certificate Form ST-28A 
Step 2 – Identify the seller’s name, business address, Sales Tax Registration Number, and a general description of what products or services the business sells
Step 3 – Describe the tangible personal property or services the buyer will be purchasing
Step 4 – Identify the name and business address of the buyer
Step 5 – The purchaser signs and dates the certificate. 

Kansas Resale Exemption Certificate FAQs

How much does a Resale Exemption Certificate cost in Kansas?

There is no cost for a Kansas Resale Exemption Certificate.

Does a Kansas Resale Certificate Expire?

Certificates do not need to be renewed or updated if there is a recurring business relationship where the buyer purchases from the seller at least once every 12 months.

How often is Kansas sales tax due?

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 have a different filing frequency.

Where do I file the Kansas Resale Exemption Certificate?

The resale certificate is kept on file by the seller and is not filed with the state.

Are sellers required to accept resale certificates?

Sellers are not required to accept resale certificates, however, most do.  If the vendor doesn’t accept the certificate, the buyer will have to pay sales tax on the merchandise being purchased. In most cases, a credit is available when filing the Kansas sales tax return. 

What steps should a business take to accept a resale certificate?

When a business is presented with a resale certificate, the burden of proof is on the seller 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 Kansas sales taxes on the seller.

Before accepting a resale certificate, a seller should:
– Review the resale certificate to make sure it is completely filled out. 
– Verify the purchaser’s Tax Registration Number is valid and active by visiting the Kansas Department of Revenue’s website.
– 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 should investigate further.  
– Keep a file of resale certificates.  Resale certificates should be kept for at least three years.

How to get a Kansas Resale Certificate (Resale Exemption Certificate)

How to get a Kansas Resale Certificate (Resale Exemption Certificate)

Greg Bouhl

Greg Bouhl

Welcome! My name is Greg Bouhl, and I am a serial entrepreneur, educator, business advisor, and investor.

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