If you’re a West Virginia business owner, did you know you can get a West Virginia Sales Tax Certificate of Exemption and not pay sales tax on certain purchases?
Learn more about a West Virginia Sales Tax Certificate of Exemption, how to get one, and more.
What is a West Virginia Certificate of Exemption?
In West Virginia, retailers can obtain a Certificate of Exemption (also commonly known as a resale certificate, reseller number, seller’s permit, wholesale license, or reseller’s license) to buy products for resale without paying state sales tax from the supplier. This exemption means that while the retailer doesn’t pay sales tax at purchase, they will collect it from customers when selling the merchandise.
For instance, a home decor store in West Virginia using a Sales Tax Certificate of Exemption will not pay state sales tax when ordering designer lamps for resale. The sales tax is charged to customers when they purchase these lamps, and it is added to the sale price.
The store totals the sales tax collected from all sales at the end of a period (monthly or quarterly, depending on sales volume) and sends this amount to the West Virginia State Tax Department. This method shifts the responsibility of paying sales tax from the retailer to the customer, with the retailer serving as the collector and remitter of the tax.
However, this sales tax exemption is strictly for goods that will be resold and does not apply to everyday business supplies like office materials, which are not eligible for tax-free purchase under this certificate.
Steps to fill out the West Virginia Streamlined Sales Tax Agreement (SSTGB FORM F0003)
Before a business starts selling products or providing taxable services, it must first get a State of West Virginia Sales and Use Tax Permit from the West Virginia State Tax Department.
Filling out SSTGB FORM F0003 is pretty straightforward, but it is important for the seller to gather all of the information. The SSTGB is short for the Streamlined Sales Tax Governing Board, where several states came together to agree on a common framework for businesses collecting and remitting sales taxes.
Step 1: Begin by downloading the West Virginia Certificate of Exemption Form SSTGB FORM F0003
Step 2: Indicate whether the Multistate Supplemental form is being attached. This is the second page of the exemption form. Several states joined together under the Streamlined Sales Tax Agreement to accept one resale form to make it easier for merchants.
Step 3: Check whether the certificate is for a single purchase. Otherwise, the form is considered a blanket certificate, which allows a buyer to purchase from a vendor multiple times without having to file a separate certificate.
Step 4: Include the name, address, and State Tax ID Number. If there is no State Tax ID Number, enter the purchaser’s FEIN and Driver’s license number.
Step 5: Enter the name and address of the seller.
Step 6: Check the box closest to the type of business the buyer is in.
Step 7: Indicate the reason for exemption. Most retailers are going to check box G for Resale.
Step 8: The purchaser will certify that the property is for resale and include their title, phone number, and email address, then sign and date the certificate.
The seller keeps the Certificate of Exemption on file and is not filed with the state.
West Virginia Certificate of Exemption FAQs
How much does a West Virginia Sales Tax Certificate of Exemption cost?
There is no cost for a Certificate of Exemption in West Virginia.
How often is West Virginia sales tax due?
Most new businesses in West Virginia 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.
Does a West Virginia Certificate of Exemption Expire?
Provided the box for using the certificate as a single purchase isn’t checked, it will be considered a blanket certificate. Blanket certificates are good if the buyer makes at least one purchase every 12 months.
Are sellers required to accept Certificates of Exemption?
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 receive a refund or credit for the sales tax paid on items purchased for resale from the state.
What steps should a business take to accept a Certificate of Exemption?
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 West Virginia sales taxes.
The following steps should be taken before accepting a Certificate of Exemption from a buyer.
– Review the Certificate of Exemption to make sure it is completely filled out.
– Verify the purchaser’s West Virginia Sales Tax Permit is valid and active by calling the State Tax Department at 800.982.8297.
– 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 all buyer’s Certificates of Exemption in case of an audit.
Is the Sales Tax Certificate of Exemption the same as a Sales u0026amp; Use Tax Permit?
The West Virginia Sales u0026amp; Use Tax Permit and Sales Tax Certificate of Exemption 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 Certificate of Exemption 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 West Virginia business licenses.
