If you buy products at retail in order to resell them, often you can avoid paying sales tax when purchasing those products by using a resale certificate (sometimes called a reseller’s permit).
In Massachusetts, this process involves presenting an Massachusetts Sales Tax Resale Certificate to the merchant from whom you’re buying the merchandise to be resold.
This guide is intended to give you what you need to know to buy products for resale and to sell products for resale in Massachusetts.
If you Wish to Use a Massachusetts Resale Certificate
Using an Massachusetts resale certificate isn’t too difficult. Once you’ve obtained a Massachusetts vendor registration, you just need to print out Massachusetts Department of Revenue form ST-4 Sales Tax Resale Certificate and fill it out. You’ll need to make sure you sign the document and give it to your vendor for their files.
Keep in mind that Massachusetts is strict when it comes to accepting resale certificates and will only allow vendors to accept Massachusetts-issued resale certificates. You can read more about Massachusetts sales tax here.
If you are Presented with a Massachusetts Resale Certificate
If you’re a retailer with nexus in Massachusetts and your buyer gives you a Sales Tax Resale Certificate for the purposes of buying items to resale, you’ll need to make sure that the form has been completed and signed. Also, in Massachusetts, retailers are only supposed to accept in-state resale certificates, so verify that the resale certificate has been issued by the Massachusetts Department of Revenue.
If you have any questions about the form, contact the Massachusetts Department of Revenue, Customer Service Bureau, PO Box 7010, Boston, MA 02204, or call (617) 887-MDOR or toll-free, in-state 1-800-392-6089.
If everything is in order, you’re ready to proceed and will want to keep a copy of the ST-4 form the buyer provided for your audit records.
I hope this guide has made clear the process of using a tax exemption certificate to purchase items in Massachusetts for resale. If you’d like to share your experience or have further questions, please start the conversation in the comments below.