Massachusetts resale certificate
What is a resale certificate and why do you need it
In Massachusetts, some services are subject to sales tax. View the Massachusetts Department of Revenue’s list of tax-exempt items for a comprehensive list of taxable services. Services or digital goods
If you’ve decided that some or all of the goods and services your company sells require sales tax, the next step is to apply for a seller’s permit.
This enables your company to collect sales tax on behalf of both the local and state governments.
You’ll need to figure out how much sales tax to charge different customers after you get your seller’s permit and start your business. It is critical for business owners to collect the correct rate of sales tax in order to avoid fines and the risk of expensive audits.
You’re ready to file your sales tax return now that you’ve applied for your Massachusetts seller’s permit and learned how to charge the correct amount of sales tax to all of your clients. To avoid penalties and fines, make sure to meet all filing deadlines.
How to start your business: getting a resellers certificate
When retailers buy goods to resell, they often do not pay sales tax to the supplier. Sales tax will still be collected, but instead of the retailer paying it, the customer will be charged sales tax on the final value of the goods. The retailer then sends the sales tax collected to the Massachusetts Department of Revenue.
When a pet store buys dog toys from a supplier to sell in the store, for example, the pet store owner usually doesn’t have to pay sales tax to the supplier. When a customer (or end-user) buys a dog toy, the retailer will charge them sales tax based on the total price of the toy. The retailer will collect sales tax from all transactions and send it to the state on a regular basis (usually at the end of the month).
The certificate’s intent is to show why sales tax was not collected on a particular transaction. Resale certificates are also known as reseller numbers, seller’s permits, exemption certificates, wholesale licenses, and reseller’s licenses. The seller must provide evidence that the buyer intends to resell the product by providing a valid resale certificate in order for the supplier to approve the tax-exempt purchase.
Wholesale or retail dealer license
The Massachusetts Department of Revenue has issued the Massachusetts Sales Tax Resale Certificate. All previous editions of the form were made obsolete on August 1, 2016, when the most recent version was released. Below is a fillable Massachusetts Form ST-4 that you can download.
To use an MA ST-4 Form, you must first register as a vendor with the DOR and receive a Sales Tax Permit, which allows you to sell and collect taxes on taxable services and goods. Then you can print and fill out a Massachusetts Resale Certificate. Do not submit the form anywhere; instead, sign it and give it to the vendor for their permanent tax and audit records. The vendor can only accept the document if the certificate is correctly completed and signed by the buyer.
How to get an ein and state tax id number
A State Sales Tax Number is required for almost every type of business. If your company sells goods over the internet, such as on eBay, or through a storefront, and the items are delivered within the same state, sales tax must be collected from the buyer and paid to the state.
You can buy things without paying sales tax in your state. When you buy something for resale, you don’t have to pay sales tax in your state. Items must be suitable for resale or qualified commercial use. In most cases, you will be exempt from paying state sales tax if you buy an item from a wholesale organization or even another retailer and resell it.