If you buy products at retail in order to resale them, you can avoid paying sales tax if you use a resale certificate.
Here’s what you need to know about use a resale certificate in the state of Illinois.
If You Wish to Use an Illinois Resale Certificate
Let’s say Laura lives in Illinois and want to go to your local big box store and source some items to resale on Amazon FBA. To do that, she’ll need to bring along an Illinois resale certificate and present it to the retailer.
Illinois is pretty flexible here. You can use the Illinois CRT-61 Certificate of Resale form or make up your own resale certificate. (You can print templates out online or buy packs of them at an office supply store.)
The certificate should include:
1) The seller’s name and address
2) the purchaser’s name and address
3) a description of the items being purchased for resale
4) purchaser’s signature, or the signature of an authorized employee or agent of the purchaser, and date of signing
5) Registration Number, Resale Number, or Certification of Resale to Out-of-State Purchaser
- purchaser’s registration number with the Illinois Department of Revenue
- purchaser’s resale number issued by the Department of Revenue
- a statement that the purchaser is an out-of-State purchaser who will sell only to purchasers located outside the State of Illinois.
If you present this, and the retailer accepts purchases for resale, then you should be all set.
If You are Presented with an Illinois Resale Certificate
Now let’s say you are the manager at the store where Laura is making her purchase for retail. You have a few responsibilities as well.
1.) Check that the resale certificate is accurate – Be sure it includes all the specified information above
2.) Check the validity of the resale certificate – It’s the retailer’s responsibility to ensure that you are truly not required to collect sales tax on the sale. You should go to the Illinois Department of Revenue website and ensure that the buyer’s resale certificate number is valid and that the certificate is active and not revoked or expired. You can find links to check the validity of a resale certificate in every state here.
3.) Keep a copy of the resale certificate – While you do not need to mail this to the Illinois Department of Revenue, you should hang on to it should there ever be any questions as to why you didn’t charge sales tax on the purchase.
If you have questions, Illinois has more info about resale certificates here.
Do you have questions or comments about Illinois resale certificates? Start the conversation in our Sales Tax for eCommerce Sellers Facebook group!