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How To Get A Mississippi Resale Certificate

How To Get A Mississippi Resale Certificate

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How To Get A Mississippi Resale Certificate

A Mississippi resale certificate, also known as a resale license or reseller’s permit, is a document that allows businesses in Mississippi to avoid paying sales tax on products that are purchased from wholesalers or manufacturers for the purpose of reselling them to customers.

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

Related: Guide to starting a business in Mississippi

What is a Mississippi Resale Certificate?

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 sales tax, the retailer charges sales tax to their customer on the final value of the merchandise. The collected sales tax is then sent by the retailer to the Mississippi Department of Revenue.

For instance, when a clothing boutique in Mississippi purchases a new line of dresses to sell in their shop, by having a resale certificate, the boutique owner won’t pay state sales tax on the purchase of inventory. When a customer decides to buy one of these dresses from the boutique, the retailer will charge the state sales tax to the customer based on the full price of the dress. Then, usually, at the end of each month, the boutique sends the gathered sales tax to the state’s tax department.

It’s important 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.

The Process

Most states provide a form the retailer fills out and provides to the vendor, however, Mississippi does not use a form.  Instead, the state only requires the retailer to provide the vendor with their Sales Tax Permit Number.

Mississippi Resale Certificate FAQs

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

The Sales Tax Permit and Resale 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.

In addition to these, your business may also need to register for additional items. For more information, check out our guide to Mississippi business licenses.

How often is Mississippi 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 instead.

What steps should a business take to accept an order for resale?

When a business receives an order for resale to be made tax-free, it is the seller’s responsibility to follow a few steps and verify the buyer’s information.

– Verify the purchaser’s Sales Tax Permit is valid and active by visiting the Mississippi Taxpayer Access Point and clicking on “Verify a Permit Number.”
– Sellers have some responsibility for considering 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 should investigate further.   Also, if the seller willingly sells merchandise tax-free and knows the buyer isn’t purchasing merchandise to resell, the seller may be liable for paying the sales taxes.
– Keep a copy of the certificates

How To Get A Mississippi Resale Certificate

How To Get A Mississippi Resale Certificate

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