When a Michigan business purchases inventory to resell, it can do so without paying state sales taxes. To do so, the retailer must provide a Michigan Certificate of Exemption (commonly known as a Resale Certificate) to its vendor. 

Learn how a Michigan Sales Tax Certificate of Exemption works, how to get one, and more.

Related: Guide to starting a business in Michigan

What is a Michigan Certificate of Exemption?

When retailers purchase products to resell, they often don’t pay state sales tax to the supplier on the purchase. The sales tax will still be paid, but instead of the retailer paying sales tax, the retailer charges state sales tax to their customer on the final value of the merchandise.

For example, when a pet store purchases dog toys from their supplier to sell in their store, the pet store owner won’t typically pay sales tax to their supplier. When a customer (or end-user) purchases the dog toy, the retailer will charge sales tax to the customer based on the full price of the toy. The retailer will collect the sales tax from all their transactions and periodically (typically at the end of the month) send the sales tax to the Michigan Department of Treasury.

It’s important to note that the sales tax exemption is only intended for inventory that will be resold and not for the tax-free purchase of items used in normal business operations, such as paper, pens, etc.

How to fill out the Michigan Sales and Use Tax Certificate of Exemption (Form 3372)

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

Step 1: Begin by downloading the Michigan Resale Certificate Form 3372 
Step 2: Indicate whether the transaction is a one-time purchase or a blanket certificate.  If the retailer is expected to purchase items frequently from the seller, instead of completing a resale certificate for every invoice, the blanket certificate box should be used. The purchaser can select whether the blanket certificate will be used in the foreseeable future or expire on a certain date. Certificates are only valid for four years.
Step 3: Check whether the certificate covers all items purchased from the seller or is limited to certain items.
Step 4: Indicate the reason for sales tax exemption.  If a retailer is purchasing merchandise for resale, check box number 2 and include their Sales Tax License Number.
Step 5: Fill out the name of the business, address, phone number, signature, title, and date.

Michigan Sales and Use Tax Certificate of Exemption Form 3372

Michigan Certificate of Exemption FAQs