Our work is reader-supported, meaning that we may earn a commission from the products and services mentioned.

How To Get A Pennsylvania Exemption Certificate

How To Get A Pennsylvania Exemption Certificate

Advertising Disclosure

Advertising
Disclosure

How To Get A Pennsylvania Exemption Certificate

When a business purchases inventory to resell, it can do so without paying sales tax.  In order to do so, the retailer will need to provide a Pennsylvania Exemption Certificate (commonly called a Resale Certificate in most states) to their vendor. 

Learn more about how the Pennsylvania Exemption Certificate works, how to get one, and more.

Related: Guide to starting a business in Pennsylvania

What is a Pennsylvania Exemption Certificate?

When retailers purchase products to resell, they often don’t pay sales tax to the supplier on the purchase. 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, when a flower shop in Pennsylvania buys a fresh stock of roses to sell in their store, having an exemption certificate allows them not to pay sales tax on this particular transaction. When an end-user decides to buy these roses, the flower shop applies sales tax to the purchase, calculating it based on the full price of the bouquet.

The flower shop collects this sales tax from all their transactions throughout a given period, usually monthly, and then sends it to the Pennsylvania Department of Revenue.

It’s worth noting 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 Pennsylvania Exemption Certificate (Form REV-1220)

Before a business starts selling products or providing taxable services, it must first get a Pennsylvania Sales Tax License from the Pennsylvania Department of Revenue. The Sales Tax License is sometimes referred to as a seller’s permit, sales tax number, or sales tax license. After registering for the sales tax license, the Pennsylvania Department of Revenue will provide a tax account ID number, which will be used when filling out the Exemption Certificate.

Step 1: Begin by downloading the Pennsylvania Exemption Certificate Form REV-1220 
Step 2: Indicate the type of tax the exemption is being requested for

  • State and local sales and use tax (what most retailers will use)
  • State and local hotel occupancy tax
  • Public transportation assistance taxes and fees
  • Vehicle rental tax
  • Additional local, city, and county hotel tax

Step 3: Check whether the certificate is for a single transaction or blanket exemption. If the retailer is expected to purchase items frequently from the seller, instead of completing a resale certificate for every invoice, the blanket exemption box should be checked.
Step 4: Enter the name and address of the seller.
Step 5: Select one of the boxes to indicate why the exemption is being requested.  Most retailers will select number 3, “Property will be resold.”  Enter the buyer’s sales tax number.
Step 6: The purchaser signs and dates the certificate and includes their address and FEIN (Federal Employer Identification Number). 

Pennsylvania Sales Tax Exemption Certificate FAQs

How much does a Pennsylvania Sales Tax Exemption Certificate cost?

There is no cost for a Certificate of Exemption in Pennsylvania.

Does a Pennsylvania Resale Certificate Expire?

Pennsylvania Resale Exemption Certificates don’t expire.

How often is Pennsylvania 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 semiannual filing frequency instead.

Where do I file the Pennsylvania sales tax exemption certificate?

In addition to the Exemption Certificate and SalesTax License, your business may also need to register for additional items. For more information, check out our guide to Pennsylvania business licenses.

Are sellers required to accept resale certificates?

Sellers are not required to accept resale certificates for tax-exempt purchases; however, most do. If the vendor doesn’t accept the certificate, the buyer will have to pay sales tax on the merchandise being purchased. In most cases, a credit for the sales taxes paid will be provided on the Pennsylvania sales tax return. 

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 Pennsylvania sales taxes.

Before accepting a resale certificate, a seller should:
– Review the resale certificate to make sure it is completely filled out. 
– The valid certificate should be in the seller’s possession within 60 days from the date of the sale
– The seller doesn’t contain anything knowingly false.
– 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.  

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

The Sales Tax License and Exemption 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 Exemption Certificate allows the retailer to make tax-exempt purchases for products they intend to resell.

In addition to the Exemption Certificate and Sales Tax license, your business may also need to register for additional items. Check out our guide to Pennsylvania business licenses for more information.

How To Get A Pennsylvania Exemption Certificate

How To Get A Pennsylvania Exemption Certificate

2 Responses

  1. How can I obtain a reseller permit in pa without having to register for an EIN ? Or LLC? Is this possible ? If so what steps as my person’s can I do to obtain a reseller licence in pa as just me. Without filing for an LLC?

    Im interested in obtaining a reseller permit in pa. To sell whole sale on Amazon. Right now I have an Amazon seller account but do fulfill my merchant on it. An my main goal it to sell wholesale on Amazon.

    1. Hi Miranda

      You don’t have to register for an LLC or EIN to get your reseller permit.

      As a business, you become a sole proprietorship business structure by default. The LLC is another type of business structure (here is a comparison of the primary four – https://startup101.com/comparison-of-business-entities/). You don’t have to register a sole proprietor, but if you want to do business under a name that is different from your first and last name in Pennsylvania, you have to file for a Fictitious Name – https://startup101.com/how-to-register-a-pennsylvania-dba/. The EIN is used as a unique number to identify a business, but as a sole proprietor, you can use your social security number.

      You will need a sales tax license before getting the reseller permit (called an Exemption Certificate in Pennsylvania) https://startup101.com/how-to-register-for-a-sales-tax-license-in-pennsylvania/.

      Hope this helps answer your questions, but if not, let me know.

      Thanks!
      Greg

Leave a Reply

Your email address will not be published. Required fields are marked *

Some (but not all) of the links on StartUp101.com are affiliate links. This means that a special tracking code is used and that we may make a small commission on the sale of an item if you purchase through one of these links. The price of the item is the same for you whether it is an affiliate link or not, and using affiliate links helps us to maintain this website.

StartUp101.com is also a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

Our mission is to help businesses start and promoting inferior products and services doesn’t serve that mission. We keep the opinions fair and balanced and not let the commissions influence our opinions.