How To Get A Virginia Sales Tax Certificate Of Exemption [Resale Certificate]

If you make purchases for resale or intend to sell taxable items and services in Virginia, you need to apply for a Sales Tax Certificate of Exemption. You can get this certificate from the Virginia Department of Taxation.

A Sales Tax Certificate of Exemption (called a Resale Certificate in many states) allows you to purchase items and services tax-free. This can save your business a lot of money since you won’t have to pay sales tax on the items you purchase for resale.

Learn more about what a resale certificate is, how to get one, and more.

What is a Sales Tax Certificate of Exemption?

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 the Virginia Department of Taxation.

For example, when a musical instruments retailer in Virginia procures a set of guitars to sell in their store, by having a resale certificate, the retailer won’t pay sales tax on the acquisition. The application of sales tax occurs when a retail customer purchases the guitar from the store. The retailer then imposes the sales tax on the full price of the guitar at this transaction.

The musical instruments retailer aggregates the sales tax from all their transactions during a specified interval, usually the end of the month. Once the month concludes, this collected sales tax is remitted to the state. This procedure effectively transfers the responsibility of paying the sales tax from the retailer to the retail customer, as the retailer functions as a conduit, amassing and dispatching the 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 Virginia Sales Tax Certificate from the Virginia Department of Taxation. The Sales Tax Certificate is sometimes referred to as a seller’s permit, sales tax number, or sales tax license.

Fillable Form ST-10 Resale Certificate of Exemption

How to fill out the Virginia Resale Certificate of Exemption – Form ST-10

Filling out Form ST-10 is pretty straightforward but is critical for the seller to gather all of the information.

If audited, the Virginia Department of Taxation requires the seller to have a correctly filled out Form ST-10 Resale Certificate of Exemption.  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-10 Virginia Resale Certificate of Exemption

Step 1 – Begin by downloading the Virginia Resale Certificate of Exemption Form ST-10 

Step 2 – Identify the name and business address of the seller

Step 3 – Check the box that represents the sales tax exemption.  Most businesses purchasing merchandise for resale will choose the first box, “Tangible personal property for RESALE only.”

Step 4 – Enter the buyer’s name, Virginia sales tax account number, business name, and address.

Step 5 – Provide a description of the buyer’s business.

Step 6 – The purchaser will certify the property being purchased is for resale and sign the certificate. 

Virginia Sales Tax Exemption Certificate FAQs