How To Get A New York Resale Certificate [2023 Guide]

A Resale Certificate (or “reseller’s license”) is a document issued by the Department of Taxation and Finance that allows businesses to buy goods for resale without paying sales tax on those goods.

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 state 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 the New York Department of Taxation and Finance.

For instance, consider a computer store in New York that buys laptops to sell in their outlet. By possessing a resale certificate, the owner of the technology store is not required to pay sales tax on the initial transaction from the wholesaler. When an individual purchases a laptop, the technology store will apply sales tax to the final user based on the full retail price of the laptop.

The technology store collects the sales tax from all their sales and usually, at the end of the month, submits the accumulated sales tax to the state.

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 New York Sales Tax Certificate of Authority from the New York Department of Taxation and Finance. The Sales Tax Certificate of Authority is sometimes referred to as a seller’s permit, sales tax permit, or sales tax license.

How to fill out the New York Resale Certificate

Filling out the New York Resale Certificate (Form ST-120) is pretty straightforward but is critical for the seller to gather all the information.

If audited, the New York Department of Taxation and Finance requires the seller to have a correctly filled out Form ST-120 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.  

Steps for filling out Form ST-120 New York Resale Certificate

Step 1 – Begin by logging into your NY.gov Business account or downloading Form ST-120.
Step 2 – Identify the name and business address of the seller
Step 3 – Identify the name and business address of the buyer
Step 4 – If the retailer is expected to be purchasing items frequently from the seller, instead of completing a resale certificate for every invoice, the blanket certificate box can be checked.  Otherwise, select single-use certificate.
Step 5 – Describe the purchaser’s type of business and the primary products sold
Step 6 – New York-based vendors will enter their Certificate of Authority Number of the vendor (purchaser) in Part 1
Step 7 – New York-based vendors will select whether the purchase being made is:
– Tangible personal property for resale or certain services
– A service for resale; or
– Restaurant-type food, heated food, or heated drink for resale

Step 8 – Out-of-state purchasers will enter their state of registration and sales tax ID number, in addition to the merchandise being purchased.
Step 9 – The purchaser will certify the property being purchased is for resale and sign and date the sales tax exemption form. 

Form ST-120 Fillable Resale Certificate

New York Resale Certificate FAQs