How To Get A Pennsylvania Exemption Certificate (Resale Certificate)

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 Pennsylvania Exemption Certificate (commonly called a Resale Certificate in most states) to their vendor. 

Learn more about what the exemption certificate is, how to get one, and more.

What is an Exemption 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 Pennsylvania Department of Revenue.

For instance, when a flower shop in Pennsylvania procures a fresh stock of roses to sell in their store, having an exemption certificate allows them not to pay sales tax on this particular transaction. When an end-user decides to buy these roses, the flower shop applies sales tax to the purchase, calculating it based on the full price of the bouquet.

The flower shop collects this sales tax from all their transactions throughout a given period, usually at the end of the month. Then, the store sends this accumulated sales tax to the state of Pennsylvania, fulfilling its role in the sales tax collection process.

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

How to fill out the Pennsylvania Exemption Certificate

Filling out Form REV-1220 is pretty straightforward, but the seller must gather all the information.

If audited, the Pennsylvania Department of Revenue requires the seller to have a correctly filled out Form REV-1220 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 REV-1220 Pennsylvania Exemption Certificate

Step 1 – Begin by downloading the Pennsylvania Exemption Certificate Form REV-1220 
Step 2 – Indicate the type of tax the exemption is being requested for

• State and local sales and use tax (what most retailers will use)
• State and local hotel occupancy tax
• Public transportation assistance taxes and fees
• Vehicle rental tax
• Additional local, city, and county hotel tax

Step 3 – Check whether the certificate is for a single transaction or blanket exemption. If the retailer is expected to be purchasing items frequently from the seller, instead of completing a resale certificate for every invoice, the blanket exemption box should be checked.
Step 4 – Enter the name and address of the seller.
Step 5 – Select one of the boxes to indicate why the exemption is being requested.  Most retailers will select number 3, “Property will be resold.”  Enter the buyer’s sales tax number.
Step 6 – The purchaser sign and dates the certificate and includes their address and FEIN (Federal Employer Identification Number). 

REV-1220 Exemption Certificate Fillable Form

Pennsylvania Sales Tax Exemption Certificate FAQs