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How To Get A South Carolina Resale Certificate

How To Get A South Carolina Resale Certificate

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How To Get A South Carolina Resale Certificate

A resale certificate is a document that allows a business to buy merchandise that will be resold without paying sales tax. In order to obtain the certificate, the retailer will need to provide a South Carolina Resale Certificate to their vendor. 

Learn more about how a South Carolina Resale Certificate works, how to get one, and more.

Related: How to start a business in South Carolina

What is a South Carolina Resale Certificate?

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 sales tax to their customer on the final value of the merchandise.

For example, let’s consider a home decor store in South Carolina. With a valid resale certificate (also referred to as a reseller number, seller’s permit, exemption certificate, wholesale license, or reseller’s license), the store owner can purchase decorative items like wall art, lamps, and vases from suppliers without paying state sales tax on those transactions. When a retail customer visits the store and purchases a wall art piece, the retailer will charge sales tax to the customer based on the item’s full price. The retailer will collect the sales tax from all their transactions and periodically remit the sales tax to the South Carolina Department of Revenue.

It’s important to know 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.

How to fill out the South Carolina Resale Certificate (Form ST-8A)

Before a business starts selling products or providing taxable services, it must first get a South Carolina Retail License from the South Carolina Department of Revenue. The Retail License is sometimes referred to as a seller’s permit, sales tax number, or sales tax license. After registering for the license, a retail license number will be provided by the Department of Revenue and will be used when filling out the Resale Certificate.

Step 1: Begin by downloading the South Carolina Resale Certificate Form ST-8A 
Step 2: Identify the name and business address of the seller
Step 3: Include the kind of business the purchaser is engaged in
Step 4: Describe the items that are sold, leased, or rented from the purchaser
Step 5: Identify the name and business address of the buyer
Step 6: Enter the purchaser’s South Carolina Retail License Number
Step 7: The purchaser will certify the property being purchased is for resale, then include their name and title and sign and date the certificate. 

South Carolina Resale Certificate FAQs

How much does a South Carolina Resale Certificate cost?

There is no cost for a Resale Certificate in South Carolina.

Does a South Carolina Resale Certificate Expire?

South Carolina Resale Certificates do not expire as long as the purchaser’s business is in operation.

How often is South Carolina 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 South Carolina Resale Certificate?

In South Carolina, the Resale Certificate is not filed with any government agency. Instead, it is kept by the seller (the business selling the merchandise for resale).

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, they will be able to get a credit for the sales taxes when filing their South Carolina sales tax return. 

What steps should a business take to accept a resale certificate?

When a business is presented with a resale certificate, the burden of proof 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 South Carolina sales taxes on the seller.

Before accepting a resale tax certificate, a seller should:
– Review the resale certificate to make sure it is completely filled out. 
– Verify the purchaser’s South Carolina Retail License is valid and active by calling the Department of Revenue at 844-898-8542, option 2, then option 3.
– 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 in case of audit. 

Is a Resale Certificate the same as a Retail License?

The Retail License and Resale Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Retail License 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.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

How To Get A South Carolina Resale Certificate

How To Get A South Carolina Resale Certificate

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