If you make purchases for resale in Nevada, you will want to get a Nevada Resale Certificate. This certificate allows you to purchase inventory tax-free, which will save a business a considerable amount of money.
Learn more about how the Nevada Resale Certificate works, how to get one, and more.
Related: Guide to starting a business in Nevada
What is a Nevada 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.
For instance, when a jewelry store in Nevada orders a collection of diamond necklaces to sell in their store, by having a resale certificate, the jewelry store owner won’t pay sales tax on this transaction. Then, when a customer decides to buy one of these diamond necklaces from the store, the retailer will charge sales tax to the customer based on the full price of the necklace. This added cost is the sales tax that Nevada imposes on retail transactions.
The jewelry store, as the retailer, is responsible for collecting this sales tax from all its transactions. Typically, at the end of each month, the jewelry store sends the collected sales tax to the state.
It’s important to realize 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 fill out the Nevada Resale Certificate
Before a business starts selling products or providing taxable services, it must first get a Nevada Seller’s Permit (from the Nevada Department of Taxation. After the permit is filed, the state will give a seller’s permit number that will be used on the Resale Certificate.
Step 1: Begin by logging into your SilverFlume account or downloading the Nevada Resale Certificate
Step 2: Enter the purchaser’s seller’s permit number
Step 3: Indicate the general line of business of the buyer
Step 4: Add the name of the seller
Step 5: Describe the property that will be purchased
Step 6: The purchaser will sign and date the certificate.
Nevada Resale Certificate Form
Nevada Resale Certificate FAQs
How much does a Nevada Resale Certificate cost?
There is no cost for a Resale Certificate in Nevada.
Does a Nevada Resale Certificate Expire?
Nevada Resale Certificates are valid for five years.
How often is Nevada 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 or annual filing frequency instead.
Where do I file the Nevada Resale Certificate?
In Nevada, 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 Certificate the same as a Seller’s Permit?
No – The Seller’s Permit and Resale Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Seller’s 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 Nevada business licenses.
What steps should a business take to accept a resale certificate?
When a small business is presented with a resale certificate, the tax compliance is on the seller to verify that the buyer’s information is correct and to keep these records. Failing to verify this information may put the liability of paying Nevada sales taxes on the seller.
Before accepting a resale certificate, a seller should:
– Review the resale certificate to make sure it is completely filled out.
– Verify the purchaser’s Nevada Business Permit Number is valid and active by visiting the Nevada Department of Taxation’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.
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