Washington's Resale Certificate Law: When Did It Begin?

The Washington resale certificate, also known as the Washington reseller permit, became law in 2009. It is a document that allows buyers to purchase items for resale without paying sales tax. The certificate came into effect on January 1, 2010, replacing the resale certificates that were previously used to substantiate the wholesale nature of sales transactions. The Washington reseller permit is issued by the Washington Department of Revenue and is generally valid for four years.

The Washington resale certificate became law in 2009 when reseller permits replaced resale certificates

Previously, a resale certificate was used to prove the wholesale nature of a sale. However, from January 1, 2010, onwards, reseller permits became the only acceptable form of documentation. This change in legislation was passed in 2009 and came into effect on January 1, 2010.

The reseller permit allows retailers, wholesalers, and manufacturers to purchase items for resale or to buy ingredients or components to create a new article for sale without paying sales tax. To receive a reseller permit, one must have the appropriate business licenses in Washington and a Labor and Industries contractor's license, if applicable.

Reseller permits are typically valid for four years, with automatic renewal, as long as the permit holder remains in good standing with the Washington Department of Revenue. However, there are certain conditions under which reseller permits are only valid for two years. These conditions include being a contractor, having a business that has been open for less than 12 months, not having reported gross income in the last 12 months, having an active non-reporting status at the time of application, or having failed to file tax returns during the previous 12 months.

Businesses that sell at wholesale must obtain a valid reseller permit or other documentation for each customer that buys without paying retail sales tax. It is important to note that reseller permits cannot be used to purchase items for personal or household use, items to be given away, or items used in the business, such as supplies and equipment.

The certificate is a document or combination of documents that authorises the wholesale nature of a sale

The Washington resale certificate, also known as the Washington reseller permit, is a document or set of documents that authorises the wholesale nature of a sale. It allows retailers, wholesalers, and manufacturers to purchase items for resale without paying sales tax.

The certificate is typically valid for four years, with automatic renewal, as long as the holder remains in good standing with the Washington Department of Revenue. However, there are certain conditions under which the permit is only valid for two years. These include if the holder is a contractor, if their business has been open for less than 12 months, if their business has not reported gross income in the last 12 months, if their business was on active non-reporting status when the application was received, or if their business has failed to file tax returns during the previous 12 months.

The Washington resale certificate can be used to purchase merchandise and inventory for resale, ingredients or components used in creating new products for sale, feed and seed for farmers, and materials and contract labour for retail or wholesale construction. It cannot be used for items for personal or household use, items to be given away, or items used in the business such as supplies and equipment.

To receive a Washington resale certificate, one must have the appropriate business licenses in Washington and, if applicable, a Labour and Industries contractor's license. The certificate must be renewed whenever there is a change in the ownership of the business that requires a new tax registration.

The Washington resale certificate is a powerful tool for businesses looking to purchase items for resale without incurring sales tax. By understanding the requirements and limitations of the certificate, businesses can take advantage of this opportunity to optimise their operations and reduce costs.

The certificate cannot be used for purchases that are not wholesale

The Washington resale certificate, also known as the Washington reseller permit, is a document that allows retailers and wholesalers to purchase items for resale without paying sales tax. This certificate became law in 2010, replacing the resale certificate, which was previously used to substantiate the wholesale nature of a sales transaction.

The resale certificate cannot be used for purchases that are not wholesale. This means that the certificate cannot be used to purchase items for personal or household use, items to be given away, or items used in the business, such as supplies and equipment. If a business attempts to use the certificate in this way, it may be subject to penalties and a 50% tax penalty, even if there was no fraud intended.

To use the Washington resale certificate, businesses must be registered with the Washington Department of Revenue and have the appropriate business licenses. The certificate can be used to purchase merchandise and inventory for resale, ingredients or components to create a new product for resale, and certain items if the purchaser is a farmer.

It is important to note that the Washington resale certificate has specific requirements and limitations, and misuse of the certificate can result in penalties and revocation of the permit. Businesses should ensure that they are using the certificate properly and only for wholesale purchases.

The certificate must be signed by an authorised individual

In Washington, a resale certificate is a document or combination of documents that substantiates the wholesale nature of a sale. The certificate must be signed by an authorised individual. This means that the buyer may authorise any person in their employ to issue and sign resale certificates on their behalf. However, the buyer is responsible for the information contained on the certificate.

The certificate must include the name of the individual authorised to sign the certificate, printed in a legible fashion, as well as their signature. This signature requirement does not apply to certificates provided in a format other than paper.

The certificate must also include the name of the seller.

Misuse of the certificate will result in a penalty

Misuse of the Washington Resale Certificate will result in a penalty

The Washington resale certificate, also known as the Washington reseller permit, is a document that allows buyers to purchase items for resale without paying sales tax. It is important to note that this certificate cannot be used for purchases that are not wholesale transactions. The misuse of this certificate will result in a penalty for the buyer.

When a buyer is issued a reseller permit, they are responsible for ensuring that it is used properly. This means that the permit should only be used to purchase items that the buyer intends to resell in the regular course of their business. If a buyer misuses their reseller permit, they may face penalties and have their permit revoked.

The penalty for misusing a Washington reseller permit includes the tax due on the improperly purchased item plus a 50% penalty, even if there was no fraud intended. This means that if a buyer uses the certificate to purchase items without paying sales tax and they are not entitled to do so, they will have to pay the tax they owe plus an additional penalty.

To avoid misuse, buyers should only use their reseller permit to purchase merchandise and inventory for resale, ingredients or components for creating new products for sale, or certain supplies if they are a farmer. The permit must not be used to purchase items for personal or household use, items to be given away, or items used in the business such as supplies and equipment.

It is important for buyers to understand the proper use of the Washington resale certificate to avoid penalties and ensure compliance with tax regulations.

Frequently asked questions