If you buy products at retail in order to resell them, you can often avoid paying sales tax when purchasing those products.
In Georgia, this process involves presenting a Georgia Sales Tax Certificate of Exemption to the merchant from whom you’re buying the merchandise to be resold.
Here’s a quick guide on what you need to know to buy products for resale and to sell products for resale in Georgia.
If you Wish to Use Georgia Resale Certificate
Using a Georgia resale certificate isn’t too difficult. You’ll need to print out Georgia Department of Revenue form ST-5 Sales Tax Certificate of Exemption and fill it out. Make sure you use the first checkbox to note that you’re using this certificate to gain exemption for the purpose of resale. If your business isn’t a non-profit you’ll need to register for a Georgia sales and use tax number which takes around 15 minutes and add that to the form. At that point, sign the document and give it to your vendor for their files.
If you are Presented with a Georgia Resale Certificate
If you’re a retailer with nexus in Georgia and your buyer gives you a Sales Tax Certificate of Exemption for the purposes of buying items to resale, you’ll need to make sure that the form has been completed and the form signed to count as a valid exemption form. The Georgia Department of Revenue also has a handy site to verify a purchaser’s sales tax number. (Accepting a resale certificate from another state? You can find links to verify a resale certificate in every state here.)
Form ST-5 states that “I understand that any tangible personal property obtained under this certificate is subject to sales and use tax if the purchaser uses or consumes the property in any manner other than indicated above,” which means you’ll definitely want to verify the purchaser’s sales tax number since you’re on the hook if the form is fraudulent.
If you have any questions about the form, contact the Georgia Department of Revenue by calling 877-423-6711 option #1. You can also review the Sales and Use Tax FAQ page.
I hope this guide has made clear the process of using a tax exemption certificate to purchase items in Georgia for resale. If you’d like to share your experience or have further questions, please start the conversation in the comments below. To learn more about how TaxJar can help you automate sales tax and remove the burden from your business, visit TaxJar.com/how-it-works.