A Florida Resale Certificate is a document that allows a business to purchase goods and services tax-free from suppliers to resell them. To skip paying sales tax, the retailer must provide a Florida Resale Certificate to their vendor.
Learn more about a resale certificate, how to get one, and more.
How Does a Florida Resale Certificate Work?
When retailers purchase products to resell, they often don’t pay sales tax to the supplier. 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.
For instance, when a restaurant in Florida purchases ingredients and food supplies from a wholesaler to prepare meals for their customers by having a resale certificate, the restaurant owner usually won’t pay sales tax on purchasing these supplies. When a customer orders a meal in the restaurant, the establishment will charge sales tax to the customer based on the full price of the meal. Then, typically, the restaurant owner will take all of the sales tax money collected and send it to the Florida Department of Revenue every month.
It’s worth mentioning that the sales tax exemption is only intended for tangible personal property that will be resold and is not intended for the tax-free purchase of items used in normal business operations, such as paper, pens, etc.
How To Get a Florida Resale Certificate
Before a business starts selling products or providing taxable services, it must first get a Florida Seller’s Permit (sometimes referred to as a Sales Tax Permit or State Tax ID) from the Florida Department of Revenue. After registering for the permit, the Florida Department of Revenue issues a Florida Certificate of Registration (Form DR-11) and a Florida Annual Resale Certificate for Sales Tax (Form DR-13) that will be provided to the vendor.
Florida Resale Certificate FAQs
How much does a Florida Resale Certificate cost?
Online registration is free; however, there is a $5 fee for registering by mail.
Does a Florida Resale Certificate expire?
Florida Resale Certificates expire each year on December 31. Active businesses will have their certificate automatically reissued by the Florida Department of Revenue.
How often is Florida sales tax due?
Most new businesses are set up to file and pay sales and use tax monthly, but depending on the amount of tax collected, your business may qualify for a different filing frequency.
Is a Resale Certificate the same as a Seller’s Permit?
The Seller’s Permit and Resale Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Seller’s Permit 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.
Your business may also need additional registrations. For more information, check out our guide to Florida business licenses.
What steps should a business take to accept a resale certificate?
When a business is presented with a resale certificate, the burden of proof is on the seller dealer to verify that the buyer’s information is correct and to keep these records. Failing to verify this information may result in the seller being liable for Florida sales taxes.
Before accepting a resale certificate, a seller should:
Obtain a copy of the buyer’s Annual Resale Certificate. There are three methods to obtain a certificate.
Method 1: Have the buyer send a paper or electronic copy. The seller should retain a copy of this certificate for three years. The resale certificate should be kept on file by both the buyer and seller and is not filed with the state.
Method 2: Obtain a transaction authorization number using the buyer’s certificate number for each sale. A copy of the certificate isn’t needed when the authorization number is recorded with the invoice. To get the authorization number, either dial 877-357-3725, visit the Florida Department of Revenue’s verification page, or use the FL Tax mobile app.
Method 3: The seller can obtain annual vendor authorization numbers for regular customers who qualify to purchase tax-free each calendar year. Visit the Certificate Verification page and upload a batch file for customer certificate verification.
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 wants to purchase office supplies tax-free, the seller may want to investigate further.
