If you’re opening a Washington DC business where you plan to purchase goods and sell them to customers, a DC resale certificate can help you get more for less.
A resale certificate is a legal document that allows business owners to purchase goods—which they will later sell to customers—from suppliers without paying sales tax. This saves the business money, and it protects the supplier by identifying who is and isn’t okay to give the exemption. It may also help DC businesses qualify for wholesale discount pricing.
Resale certificates are closely related to seller’s permits and sales tax permits, and the three are often lumped together. A business does need to have a Washington DC seller’s permit and sales tax permit in order to get a resale certificate, but they’re still technically different.
You might hear resale certificates referred to by other names, such as:
No matter what name it goes by, the function of the document is still the same. It still grants you the legal permissions your business needs to purchase wholesale goods tax-free and resell them to customers.
Unlike a seller’s permit, which is required by law, a resale certificate isn’t necessarily required to operate a business in Washington DC. However, it’s very easy to get and is absolutely encouraged for any resale business. There’s really no downside to having this certificate; you can still buy and sell without it, but there’s no reason to dismiss the financial benefits.
Any DC area business that purchases and resells physical, tangible goods should have a resale certificate to avoid tax. If you plan to buy from multiple suppliers, you’ll also need to have a resale certificate in place with each one. Always keep physical or digital copies of each one on hand in case you’re ever asked to prove your status.
Examples of businesses who might need a resale certificate include:
Ultimately, the government and the suppliers want to be sure that the required tax will be paid somewhere along the line. For them, a DC resale certificate is like a promise that the business will charge the customer for that tax when the goods are resold. Without this document, suppliers can’t tell who qualifies and are legally obligated to charge sales tax.
Expiry dates vary throughout the U.S., and the rules can be quite different. In the District of Columbia, this certification lasts for one year from the date of issue. If you have multiple certificates with several suppliers, make sure you keep track of when each of them needs to be renewed.
In order to get a DC resale certificate, your business first needs to have a seller’s permit (or business license) and a sales tax ID. If you haven’t already done so, you’ll need to file for a District of Columbia sales tax license. Once you have a District of Columbia business license and tax ID number, you’re ready to get your resale certificate.
Here’s how it works when you file with FastFilings:
If you’re planning to buy and sell products in Washington DC, applying for a resale certificate is an excellent way to start your business out on the right foot. Fill out our simple application form to request your certification today, or contact our support team for more information on how to start a Washington DC business.
