If you buy products exclusively to resale in the state of Maryland, you can often avoid paying sales tax on your purchases by presenting a Maryland resale certificate at checkout. Always keep in mind that you should only use your resale certificate to buy items you intend to resell or that you intend to use as a component part of an item for resale or incorporated into a service that will be taxed when it is sold. Any other use of a Maryland resale certificate (such as buying office supplies or personal items) is usually considered unlawful.
Here are the rules and regulations for using (and accepting) a resale certificate in Maryland.
How to Use a Maryland Resale Certificate
Maryland is one of the states that does not issue a specific resale certificate. Instead, they provide buyers and sellers with a list of info that must be included on a resale certificate you present to your vendor. You can print out the Maryland Suggested Blanket Resale Certificate below, download another template from online, or even buy a pack of resale certificates from the office supply store down the street.
The resale certificate you give your vendor must include:
- A signed statement that the purchase is intended for resale
- The purchaser’s name and address
- The purchaser’s Maryland sales and use tax registration number
Important to Note: Maryland is one of 10 states that does not allow retailers to accept out-of-state resale certificates. If you wish to purchase items for resale from vendors in Maryland, you are required to register for a Maryland sales tax permit and collect sales tax from your Maryland buyers.
Here’s a suggested resale certificate:
A note on purchases under $200:
“In Maryland, resale certificates may not be used to make tax-free purchases for resale if the purchase is less than $200 and payment is by cash, check or credit card unless the seller delivers the goods directly to the buyer’s retail place of business. Read more at the Maryland Department of Revenue website.”
How to Accept a Maryland Resale Certificate
If you are a retailer and are presented with a Maryland resale certificate, you have a few responsibilities:
- Note that purchases under $200 are subject to special rules – “Resale certificates may not be used to make tax-free purchases for resale if the purchase is less than $200 and payment is by cash, check or credit card unless the seller delivers the goods directly to the buyer’s retail place of business.” Read more at the Maryland Department of Revenue website.
- Make sure the resale certificate form is filled out accurately and completely – Ensure the form is properly filled out and signed by the buyer.
- Verify that the purchaser has a Maryland resale certificate and Tax ID– Maryland is one of 10 states that does not allow vendors to accept out-of-state sales tax permits. Verify the validity of your buyer’s Maryland sales tax ID on the Maryland Department of Revenue website. You can find links to verify resale certificates in every state here.
- Keep the resale certificate on file – Keep a fully executed and signed copy of this form in case of audit. If you do not have a resale certificate on hand you could be held liable for uncollected sales tax.
I hope this answers your questions about using or accepting a Maryland resale certificate. Have questions or something to say? Start the conversation in the comments! And to learn more about TaxJar and get started, visit TaxJar.com/how-it-works.