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How to get a Maine Resale Certificate [2023 Guide]

How to get a Maine Resale Certificate [2023 Guide]

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How to get a Maine Resale Certificate [2023 Guide]

How to get a Maine Resale Certificate [2023 Guide]

When a business purchases inventory to resell, it can do so without paying sales tax.  In order to do so, the retailer will need to provide a Maine 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 state 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. The collected sales tax is then sent by the retailer to Maine Revenue Services.

For instance, when a bookstore in Maine procures a new collection of books to offer in their store, the bookstore owner can use a resale certificate to evade sales tax on that specific transaction. This is due to the fact that the books are not a final purchase, but items meant to be sold to the end consumer.

Later on, when a customer decides to buy a book from the store, the retailer will apply sales tax to the customer based on the full price of the book. This added cost is the sales tax that the state of Maine levies on retail transactions.

The bookstore, as the retailer, is responsible for collecting this sales tax from all their transactions. Then, typically at the end of each month, the bookstore sends the collected sales tax to the state’s tax authority.

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 Sales Tax Account from Maine Revenue Services. The Sales Tax Account is also referred to as a seller’s certificate, sales tax number, sales tax exemption certificate, or sales tax license.

Is a Resale Certificate the same as a Sales Tax License?

The Sales Tax License and Resale Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Sales Tax License 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 register for a Maine Sales Tax License

Applying for the Resale Certificate

After registering for the Sales Tax Account, a Resale Certificate will be automatically issued if the business indicates they anticipate making over $3,000 annually.

Example Maine Resale Certificate

Example Maine Resale Certificate

Maine Resale Certificate FAQs

How much does a Resale Certificate cost in Maine?

There is no cost for a Maine Resale Certificate

Does a Maine Resale Certificate expire?

Maine Resale Certificates are valid from the date of issue to December 31st, plus three years.  The certificate will be automatically renewed if the certificate holder has reported $3,000 or more in gross sales during the previous 12 months.

How often is Maine 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 Maine Resale Certificate?

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

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 Maine sales tax return. 

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

When a small 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 Maine 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 Maine certificate is valid and active by visiting the Maine Revenue Service’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 are wanting to purchase office supplies tax-free, the seller should investigate further.   
– Resale Certificates must be kept on file for a minimum of 6 years. 

How to get a Maine Resale Certificate [2023 Guide]

How to get a Maine Resale Certificate [2023 Guide]

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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