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How To Get A Louisiana Resale Certificate

How To Get A Louisiana Resale Certificate

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How To Get A Louisiana Resale Certificate

A Louisiana Resale Certificate is a document that allows a business in Louisiana to purchase goods and services tax-free from suppliers for the purpose of reselling them. In order to use one, the retailer must provide a Louisiana Resale Certificate to their vendor. 

Learn more about how the Louisiana Resale Certificate works, how to get one, and more.

Related: Guide to starting a business in Louisiana

How Does a Louisiana Resale 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 seafood market in Louisiana purchases items like shrimp, crawfish, or oysters from local fishermen or seafood distributors to sell in their market, by having a resale certificate, the market owner won’t pay sales tax on these transactions. When a customer purchases seafood to make dinner at home, the state sales tax will be charged to the customer based on the full price of the items. Throughout the course of the business day, the seafood market will accumulate sales tax from all their transactions with customers, and typically, at the end of the month, the market owner will send these funds to the Louisiana Department of Revenue.

Note that the sales tax exemption is only intended for inventory 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 Louisiana Resale Certificate

Before a business starts selling products or providing taxable services, it must first get a Louisiana Sales Tax License (sometimes called a seller’s permit) from the Louisiana Department of Revenue. Assuming the buyer’s Sales Tax License application was registered using a NAICS code that indicates the business sells tangible personal property, the Louisiana Department of Revenue will automatically issue the Resale Certificate.

Otherwise, you will apply online through the Louisiana Department of Revenue’s LaTAP system.

The following information will be needed to begin the application process:

  • Account numbers for all locations
  • Locations and mailing addresses for all business locations
  • Current NAICS code
  • A valid e-mail address
  • If applicable, the last 2 years of resale inventory purchase amounts (for consolidated filers, purchase amounts should consist of the combined purchases of all members of the consolidation)

Louisiana Resale Certificate FAQs

How much does a Louisiana Resale Certificate cost?

There is no cost for a Louisiana Resale Certificate.

Does a Louisiana Resale Certificate Expire?

The Louisiana Resale Certificate is automatically renewed as long as the business reports sales activities in the state and is current on all tax payments.  

How often is Louisiana 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 quarterly filing frequency.

Is a Resale Certificate the same as a Sales Tax License?

The Sales Tax License and Resale Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Sales Tax License 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 Louisiana 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 Louisiana 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 resale certificate is valid and active by visiting the Louisiana Department of Revenue’s website and look for the “Resale Certificate Validation” section.
– 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.

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How To Get A Louisiana Resale Certificate

How To Get A Louisiana Resale Certificate

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