A Wisconsin Sales Tax Exemption Certificate allows a business to purchase goods and services tax-free from suppliers for the purpose of reselling them. In other states, the certificate is also sometimes referred to as a “resale permit” or a “reseller’s permit.”
Learn more about a Wisconsin sales tax exemption certificate, how to get one, and more.
What is a Sales Tax Exemption Certificate?
In Wisconsin, retailers with a Sales Tax Exemption Certificate can buy products for resale without paying state sales tax to the supplier. This certificate proves that the items purchased will be sold to customers; therefore, the retailer does not pay sales tax at the time of purchase.
For example, a chocolate shop in Wisconsin with this certificate won’t pay sales tax when buying gourmet chocolates for resale. Instead, the shop collects sales tax from customers when they buy the chocolates. This added tax is based on the final sale price.
At the end of the filing period (usually monthly, but it can be quarterly or annually, depending on the business’s sales volume), the shop calculates the total sales tax collected from all transactions. It sends this amount to the Wisconsin Department of Revenue. This system shifts the responsibility of paying the sales tax from the retailer to the customer, with the retailer serving as the intermediary who collects and remits the tax to the state.
The exemption is specifically for items that will be resold, not for everyday business supplies like office stationery, which are not eligible for tax-free purchase under this certificate.
Steps to fill out the Wisconsin Sales and Use Tax Exemption Certificate (Form S-211)
Before you can get an Exemption Certificate, you will first need to have registered for a Wisconsin Seller’s Permit. After registering, the Wisconsin Department of Revenue will provide a tax ID number to be used when filling out the Sales Tax Exemption Certificate.
Step 1: Begin by downloading the Wisconsin Resale Exemption Certificate Form S-211.
Step 2: Indicate whether the certificate is for a single or ongoing purchase. If the retailer is expected to purchase items frequently from the seller, continuous (also known as a blanket certificate) should be checked instead of completing a resale certificate for every invoice.
Step 3: Identify the buyer’s name, address, type of business, and Tax ID Number or FEIN.
Step 4: Enter the name and address of the seller.
Step 5: Check the reason for exemption. Most businesses purchasing merchandise to resell will choose the first box, “Resale.” If so, enter the purchaser’s Seller’s Permit or Use Tax Certificate Number.
Step 6: The purchaser will certify that the property is for resale and sign and date the certificate.
Wisconsin Sales Tax Exemption Certificate FAQs
How much does a Wisconsin Sales Tax Exemption Certificate cost?
The tax exemption certificate is free; however, the Wisconsin Seller’s Permit has a $20 fee.
How long is a Wisconsin sales tax exemption certificate good for?
Wisconsin Sales Tax Exemption Certificates do not expire, but it is recommended that they be periodically updated in case the reseller’s information changes – https://docs.legis.wisconsin.gov/code/admin_code/tax/11/iii/14/5/a.
How often is Wisconsin sales tax due?
Most new businesses in Wisconsin 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 Wisconsin Sales Tax Exemption Certificate?
In Wisconsin, the Sales Tax Exemption Certificate is not filed with any government agency. Instead, it is kept by the seller (the business selling the merchandise for resale).
Is a Sales Tax Exemption Certificate the same as a Seller’s Permit?
The Seller’s Permit and Sales Tax Exemption Certificate are commonly thought of as the same thing, but they are actually two separate documents. The Seller’s Permit (also known as a Sales Tax Number) allows a business to sell and collect sales tax from taxable products and services in the state, while the Sales Tax Exemption 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 Wisconsin business licenses.
What steps should a business take to accept a tax-exempt 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 Wisconsin sales taxes.
The following steps should be taken before accepting a resale certificate from a buyer.
– Review the resale certificate to make sure it is completely filled out.
– Verify the purchaser’s Wisconsin Seller’s Permit is valid and active by visiting the Wisconsin Department of Revenue and verifying the seller’s permit number.
– If the purchaser does not have a federal employer identification number, then the purchaser’s personal driver’s license number and state of issue are needed.
– 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.
Are sellers required to accept a Sales Tax Exemption Certificate?
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.
