How to get a Resale Certificate in Oklahoma

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Quick Reference

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 Oklahoma 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 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 Oklahoma Tax Commission.

For example, when a pet store purchases dog toys from their supplier to sell in the store, the pet store owner won’t typically have to pay sales tax to their supplier. When a customer (or end-user) purchases the dog toy, the retailer will charge sales tax to the customer based on the full price of the toy. The retailer will collect the sales tax from all their transactions and periodically (typically at the end of the month) send the 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.

Note that the Resale Certificate is different from a business license. Learn more about starting a business in Oklahoma.

Getting Started

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

Is a resale certificate the same as a sales tax ID?

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 register for an Oklahoma Sales Tax Permit

After registering, a sales tax number will be provided by the Tax Commission. This number will be listed on the Resale Certificate.

A Resale Certificate can be generated by the buyer or seller, provided the certificate contains the required information as outlined in Oklahoma Rule 710:65-3-33, which include:

  • The name and address of the customer
  • The character of the transaction
  • The date
  • The amount of gross receipts or gross proceeds
  • Any other information that may be necessary to establish the nontaxable character of such transactions under the Sales Tax Code.

Instead of making a form, the Uniform Resale Certificate can be used.  This is a multi-jurisdiction form which means it can be used as a Resale Certificate in any of the states listed on the form.

Uniform Resale Certificate Fillable Form

 

How to fill out the Uniform Resale Certificate

Filling out the certificate is pretty straightforward, but is critical for the seller to gather all the information.

If audited, the Oklahoma Tax Commission requires the seller to have a correctly filled out 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 the Uniform Sales & Use Tax Certificate

Step 1 – Begin by downloading the Uniform Sales Tax Exemption Certificate 
Step 2 – Identify the name and business address of the seller
Step 3 – Identify the name and business address of the buyer
Step 4 – Check whether the buyer is engaged as a registered wholesaler, retailer, manufacturer, seller, or lessor
Step 5 – Provide a description of the buyer’s business
Step 6 – Describe the tangible property or taxable services that will be purchased from the seller
Step 7 – Include the Oklahoma Sales Tax Permit Number
Step 8 – The purchaser will certify the property being purchased is for resale and sign and date the certificate. 

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

Does the Uniform Resale Certificate Expire?

The Uniform Resale Certificate does not expire.

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, they will be able to get a credit for the sales taxes paid later on their sales tax filing. 

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 Oklahoma 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 Oklahoma sales tax permit is valid and active by visiting the Tax Commission’s Permit Lookup database.
  • 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.  
  • Keep a file of resale certificates. 

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