How To Get A Wisconsin Sales Tax Exemption Certificate (Resale Certificate)

A Wisconsin Sales Tax Exemption Certificate is a document that allows a business to purchase goods and services tax-free from suppliers for the purpose of reselling those goods and services. The certificate is also sometimes referred to as a “resale permit” or a “reseller’s permit.”

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

What is a Sales Tax Exemption 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 based on the final value of the merchandise. The collected sales tax is then sent by the retailer to the Wisconsin Department of Revenue.

For instance, when a specialty chocolate shop in Wisconsin sources a variety of gourmet chocolates to sell in their store, by possessing a Sales Tax Exemption Certificate, the shop owner doesn’t pay sales tax on this procurement. The sales tax is charged when a retail customer purchases the gourmet chocolate from the shop. The retailer then adds the sales tax to the total cost of the chocolate during this transaction.

The specialty chocolate shop accumulates the sales tax from all their transactions during a given interval, typically at the end of the month. After the month concludes, the shop forwards this collected sales tax to the state. This procedure effectively moves the obligation of paying the sales tax from the retailer to the retail customer, while the retailer acts as a go-between, gathering and submitting the tax to the state.

The purpose of the certificate is to provide evidence of why sales tax was not collected on a transaction. 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 Sales Tax Exemption 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.

Is a Sales Tax Exemption Certificate the same as a Seller’s Permit?

The Seller’s Permit and Sales Tax Exemption Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Seller’s Permit (also known as a Sales Tax Number) 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.

Read more about registering for a Wisconsin Seller’s Permit. After registering, a Tax ID Number will be provided by the Department of Revenue. This number will be listed on the Resale Exemption Certificate.

Fillable Form S-211 Sales and Use Tax Exemption Form

How to fill out the Wisconsin Sales and Use Tax Exemption Certificate

Filling out Form S-211 is pretty straightforward but is critical for the seller to gather all the information.

If audited, the Wisconsin Department of Revenue requires the seller to have a correctly filled out Form S-211 Resale 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 Form S-211 Wisconsin Sales and Use Tax Exemption Certificate

Step 1 – Begin by downloading the Wisconsin Resale Exemption Certificate Form S-211.

Step 2 – Indicate whether the certificate is for a single purchase or ongoing purchases. If the retailer is expected to be purchasing items frequently from the seller, instead of completing a resale certificate for every invoice, continuous (also known as a blanket certificate) should be checked.

Step 3 – Identify the name, address, type of business, and Tax ID Number or FEIN of the buyer.

Step 4 – Enter the name and address of the seller.

Step 5 – Check the reason for exemption. Most businesses purchasing merchandise to resell will choose the first box, “Resale.” If so, enter the purchaser’s Seller’s Permit or Use Tax Certificate Number.

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

Wisconsin Sales Tax Exemption Certificate FAQs

How much does a Sales Tax Exemption Certificate cost in Wisconsin?

There is no cost for the tax exemption certificate, however, there is a $20 fee for the Wisconsin Seller’s Permit.

How long is a Wisconsin sales tax exemption certificate good for?

Wisconsin Sales Tax Exemption Certificates do not expire, but it is recommended to periodically update them, in case the reseller’s information changes –https://docs.legis.wisconsin.gov/code/admin_code/tax/11/iii/14/5/a.

How often is Wisconsin sales tax due?

Most new businesses in Wisconsin 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 quarterly or annual filing frequency instead.

Where do I file the Wisconsin Sales Tax Exemption Certificate?

The Sales Tax Exemption Certificate is kept on file by the seller and is not filed with the state of Wisconsin.

What steps should a business take to accept a tax-exempt 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 Wisconsin sales taxes on the seller.

Before accepting a resale certificate from a buyer, the following steps should be taken.

– Review the resale certificate to make sure it is completely filled out.
– Verify the purchaser’s Wisconsin Seller’s Permit is valid and active by visiting the Wisconsin Department of Revenue and verifying the seller’s permit number.
– If the purchaser does not have a federal employer identification number, then the purchaser’s personal driver’s license number and state of issue are needed.
– 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 want to purchase office supplies tax-free, the seller should investigate further.

Are sellers required to accept a Sales Tax Exemption Certificate?

Sellers are not required to accept resale certificates for tax exempt purchases, 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 get a credit for the sales taxes when paying their Wisconsin sales tax filing.