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How To Get A Kansas Resale Exemption Certificate

How To Get A Kansas Resale Exemption Certificate

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How To Get A Kansas Resale Exemption Certificate

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

Learn how the Kansas Resale Exemption Certificate works, how to get one, and more.

Related: Guide to starting a business in Kansas

How Does a Kansas Resale Exemption Certificate 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 grocery store in Kansas purchases goods like produce, canned goods, or baking supplies from a distributor to sell in their store, by having a resale certificate, the grocery store owner won’t pay sales tax on these transactions. When a customer purchases groceries, the retailer will charge sales tax to the customer based on the full price of the items. Then, typically, at the end of the month, the grocery store owner will take the collected state sales tax and send it to the Kansas Department of Revenue.

Be sure to note 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 items used in normal business operations such as paper, pens, etc.

Steps To Fill Out the Kansas Resale Exemption Certificate (Form ST-28A)

Kansas Resale Certificate

Before a business starts selling products or providing taxable services, it must first get a Kansas Business Tax License (sometimes referred to as a sales tax license or seller’s permit) from the Kansas Department of Revenue. After registering for the license, a business tax number will be issued, which is needed when filling out the resale certificate.

Step 1: Begin by downloading the Kansas Resale Exemption Certificate Form ST-28A 
Step 2: Identify the seller’s name, business address, Sales Tax Registration Number, and a general description of what products or services the business sells
Step 3: Describe the tangible personal property or services the buyer will be purchasing
Step 4: Identify the name and business address of the buyer
Step 5: The purchaser signs and dates the certificate. 

Kansas Resale Exemption Certificate FAQs

How much does a Kansas Resale Exemption Certificate cost?

There is no cost for a Kansas Resale Exemption Certificate.

Does a Kansas Resale Certificate Expire?

Certificates do not need to be renewed or updated if there is a recurring business relationship where the buyer purchases from the seller at least once every 12 months.

How often is Kansas 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 have a different filing frequency.

Where do I file the Kansas Resale Exemption Certificate?

In Kansas, the certificate is not filed with any government agency. Instead, it is kept by the seller (the business selling the merchandise for resale).

Is a Resale Exemption Certificate the same as a Sales Tax Permit?

The Sales Tax Permit and Resale Exemption Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Sales Tax 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.

Also, in addition to these, your business may need to register for additional items. For more information, check out our guide to Kansas 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 Kansas 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 Tax Registration Number is valid and active by visiting the Kansas Department of Revenue’s website.
– 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.  Resale certificates should be kept for at least three years.

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 Kansas Resale Exemption Certificate

How To Get A Kansas Resale Exemption Certificate

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