If you buy products at retail in order to resell them, you can often avoid paying sales tax when purchasing those products.
In Indiana, this process involves presenting an Indiana General Sales Tax Exemption certificate 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 Indiana.
If you Wish to Use an Indiana Resale Certificate
Using an Indiana resale certificate isn’t too difficult. Once you’ve registered for your Indiana sales tax permit, you just need to print out Indiana Department of Revenue form ST-105 – General Sales Tax Exemption Certificate (link is a pdf download) and fill it out. Make sure you use the first checkbox in Section 3 to note that you’re using this certificate to gain exemption for the purpose of resale. At that point sign the document and give it to your vendor for their files.
Keep in mind that if you are registered for an Indiana sales tax permit you’ll be required to collect sales tax from Indiana buyers.
If you are Presented with an Indiana Resale Certificate
If you’re a retailer with nexus in Indiana and your buyer gives you a General Sales Tax Exemption Certificate for the purposes of buying items to resale, you’ll need to make sure that the form has been completed. Each of the four sections needs to be filled out and the form must be signed for it to count as a valid sales tax exemption form.
If you have any questions about the form or the buyer’s sales tax credentials, contact the Indiana Department of Revenue by calling 317-233-4015. (Unlike in many other states, online verification of an Indiana resale certificate is not available.) If everything is in order, you’re ready to proceed. You will want to keep the ST-105 form the buyer provided for your records in case of an audit.
I hope this guide has made clear the process of using a tax exemption certificate to purchase items in Indiana for resale. If you’d like to share your experience or have further questions, please start the conversation in the comments below.
Ready to automate sales tax? To learn more about TaxJar and get started, visit TaxJar.com/how-it-works.
