An Oklahoma Resale Certificate is an important document that allows businesses in Oklahoma to purchase merchandise for resale without paying sales tax. This certificate is also sometimes called a “Sales Tax Exemption Certificate,” a “Reseller’s license,” or a “Certificate of Resale.”
Learn more about how an Oklahoma resale certificate works, how to get one, and more.
What is an Oklahoma Resale Certificate?
When retailers purchase products to resell, they often don’t pay sales tax to the supplier. The state 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, let’s consider a sporting goods store in Oklahoma. The retailer can acquire sports equipment from manufacturers and wholesalers without paying sales tax with a valid resale certificate. When a retail customer purchases a sports item, such as a basketball or a tennis racket, the retailer (in this case, the sporting goods store) will include the sales tax based on the item’s full price. The retailer collects the sales tax from all their transactions and periodically, typically monthly, remits the accumulated sales tax to the state.
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 Obtain an Oklahoma Resale Certificate
Before a business starts selling products or providing taxable services, it must first get an Oklahoma Sales Tax Permit (sometimes referred to as a seller’s permit, sales tax number, or sales tax license) from the Oklahoma Tax Commission. After registering for the permit, the Oklahoma Tax Commission will provide a sales tax number, which will be used when filling out the Resale Certificate.
Step 1: Begin by downloading the Uniform Sales Tax Exemption Certificate*
Step 2: Identify the name and business address of the seller
Step 3: Identify the name and business address of the buyer
Step 4: Check whether the buyer is engaged as a registered wholesaler, retailer, manufacturer, seller, or lessor
Step 5: Describe the buyer’s business
Step 6: Describe the tangible property or taxable services that will be purchased from the seller
Step 7: Include the Oklahoma Sales Tax Permit Number
Step 8: The purchaser will certify that the property is for resale and sign and date the certificate.
*The buyer or seller can also generate a Resale Certificate, provided the certificate contains the required information as outlined in Oklahoma Rule 710:65-3-33, which includes:
- The name and address of the customer
- The character of the transaction
- The date
- The amount of gross receipts or gross proceeds
- Any other information to establish the nontaxable character of such transactions under the Sales Tax Code.
Oklahoma Resale Certificate FAQs
How much does an Oklahoma Resale Certificate cost?
There is no cost for a Certificate of Exemption in Oklahoma.
Does the Uniform Resale Certificate Expire?
The Uniform Resale Certificate does not expire.
Where do I file the Oklahoma Resale Certificate?
In Oklahoma, the Resale Certificate is not filed with any government agency. Instead, it is kept by the seller (the business selling the merchandise for resale).
How often is Oklahoma 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 semi-annual filing frequency instead.
Are sellers required to accept resale certificates?
Vendors can decline resale certificates, even if they’re valid and properly completed. While most accept resale certificates as standard practice, there’s no legal requirement for them to do so.
If a vendor refuses to accept your resale certificate, you can still complete the purchase by paying the sales tax. The tax paid in this situation isn’t lost – you can file a claim and receive a refund or credit for the sales tax paid on items purchased for resale.
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 make the seller liable for Oklahoma sales taxes.
Before accepting a resale certificate, a seller should:
– Review the resale certificate to make sure it is completely filled out.
Visit the Oklahoma Tax Commission’s Permit Lookup database to verify the purchaser’s Oklahoma sales tax permit is valid and active.
– 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 wants to purchase office supplies tax-free, the seller should investigate further.
– Keep a file of resale certificates.
Is a Resale Certificate the same as a Sales Tax Permit?
No – 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.
These are two of several registrations your business may need. To learn more, check out our guide to Oklahoma business licenses.
