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How To Get A Hawaii Certificate of Resale

How To Get A Hawaii Certificate of Resale

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How To Get A Hawaii Certificate of Resale

When a business purchases inventory to resell, it can often do so without paying sales tax.  In order to do so, the retailer will need to provide a Hawaii Certificate of Resale (also referred to as a Resale Certificate) to their vendor. 

Learn how the Hawaii Certificate of Resale works, how to get one, and more.

Related: How to start a business in Hawaii

How Does a Hawaii Certificate of Resale Work?

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 the state sales tax, the retailer charges sales tax to their customer on the final value of the merchandise.

For instance, when a souvenir shop in Hawaii purchases products such as jewelry, crafts, or clothing to sell in their store, by having a Certificate of Resale, the shop owner won’t often pay sales tax on the purchase of its inventory. When a tourist purchases a souvenir, the retailer will charge sales tax to the customer based on the full price of the item. Then, typically at the end of the month, the shop owner will take all of the state sales taxes that were collected and send them to the Hawaii Department of Taxation.

It’s important to understand that 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 tangible personal property used in normal business operations such as paper, pens, etc.

How To Fill Out the Hawaii Certificate of Resale (Form G-17)

 G-17 Certificate of Resale Fillable Form

Before a business starts selling products or providing taxable services, it must first get a Hawaii General Excise Tax License (sometimes referred to as a sales tax license or seller’s permit) from the Hawaii Department of Taxation. After registering for the license, the Hawaii Department of Taxation will issue a state tax identification number, which will be used to fill out the Certificate of Resale.

Step 1: Begin by downloading the Hawaii Certificate of Resale Form G-17 

Step 2: Identify the name and address of the seller

Step 3: Enter the date the certificate was prepared

Step 4: Include the buyer’s Hawaii Tax Identification Number

Step 5: Describe the nature and character of the buyer’s business

Step 6: Indicate whether the purchases are for resale at retail or leases or resale at wholesale

Step 7: Enter the name, address, title, and signature of the buyer.

If, at any time, the percentage of purchases for resale changes, the certificate should be updated.


Hawaii Resale Certificate FAQs

How much does a Hawaii Certificate of Resale cost?

There is no cost for the Hawaii Certificate of Resale.

Does a Hawaii Certificate of Resale expire?

Hawaii resale certificates don’t expire, however, if the buyer’s information changes, the buyer should send a new certificate to their vendors.

Where do I file the Hawaii Certificate of Resale?

In Hawaii, the certificate is not filed with any government agency. Instead, it is kept by the seller (the business selling the merchandise to the reseller).

How often is the Hawaii General Excise 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 have a different filing frequency.

Is a Certificate of Resale the same as a General Excise Tax License?

No – The General Excise Tax License and Certificate of Resale are commonly thought of as the same thing, but they are actually two separate documents. The General Excise Tax License allows a business to sell and collect sales tax from taxable products and services in the state, while the Certificate of Resale allows the retailer to make tax-exempt purchases for products they intend to resell.

Also, in addition to these, your business may need to register for additional items. For more information, check out our guide to Hawaii business licenses.

What steps should a business take to accept a resale certificate?

When a business is presented with a resale certificate, the seller has the burden of proof 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 paying Hawaii sales taxes.

Before accepting a resale certificate, a seller should:
– Review the resale certificate to make sure it is completely filled out. 
– Verify that the purchaser’s Hawaii sales tax license is valid and active by visiting the Hawaii Tax Online page.
– 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.    
– Keep a file of resale certificates. 

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

How To Get A Hawaii Certificate of Resale

How To Get A Hawaii Certificate of Resale

4 Responses

    1. Hi Jameel – If you are purchasing products for resale, you will give the G-17 certificate for the vendor to keep. If you are selling goods where the buyer is going to resell the merchandise, you will keep the certificate in a file, as the certificate is not sent to the Hawaii Department of Taxation. The Department of Taxation will randomly audit sellers to make sure they have the forms.

  1. This is all very complicated. I filed for an LLC and I have an EIN number. I will be purchasing products wholesale from other countries and will be reselling them wholesale to a store owner here in Hawaii. I may at some time open a booth at the swap meet or a Farmer’s market to sell goods. What licenses and permits do I need?

    1. Hi John – Totally agree! Have you checked out this resource yet? – https://startup101.com/hawaii-business-licenses-permits/

      I can see two things that you will have to regiser for:
      – General Excise Tax (every business will need to register with the Hawaii Department of Taxation. You will get this before the resale certificate.
      – County business license (depending on which island your business is located)
      – Depending on what you are reselling, you may need additional licensing, especially if food-based.

      Hope this helps some. Let me know if you have any other questions!

      Greg

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