Reseller Permit Replaces Resale Certificate.

7 12 2009

FYI. Effective January 1, 2010, resale certificates that allow Washington businesses to purchase items or services for resale, without paying retail sales tax, will be replaced by a reseller permit issued by the Department of Revenue (Senate Bill 6173). In the past, many businesses could download a “resale certificate” entitling them to a sales-tax exemption, but on Jan. 1, they will instead have to obtain a new reseller permit by filling out an application. As a result, the WA legislature hopes to prevent over $100 million in sales tax from being exempted by those who abuse the resale certificate – of which they blame 40% on the construction industry.

The Puget Sound Business Journal reported today that about 20,000 Washington businesses have not applied for this reseller permit. Consequently, they will be in for a “big surprise the next time they try to purchase products or materials at wholesale and find out that they have to pay sales tax.”

The Department of Revenue has posted FAQs regarding this new permit, including the following questions:

  • How do I get a reseller permit?
  • What if I don’t get a reseller permit, but need to make purchases for resale?
  • How long is a reseller permit valid?

Resale certificates are still valid through December 31, 2009. Though, in order to begin the new year without hiccups, it’s worth the effort to apply for the reseller permit beforehand. Businesses registered with the Department before January 1, 2010 will get a permit valid for four years. Otherwise, businesses registered after the new year will get a permit valid for two years that can be renewed for four years thereafter.

Just as in Scrabble, think ahead and plan your next move – luck comes to the prepared.

Photo courtesy of Freehold In Jersey.

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3 responses

8 12 2009
Useful Sales Tax Blog. « The Company Line: BLOG

[…] researching information about the new reseller permits effective January 1, 2010 in Washington, I came across a useful sales tax blog. The Sales Tax Connection is a blog about sales tax issues […]

15 12 2009
thecompanyline

Of intrigue, I happened upon an interesting article about sales tax laws dictating whether affiliates, of internet retailers, constitute a physical presence in certain states.

What are affiliate? Per the article, and affiliate is “a person or business that has signed up with a web retailer to post links to the online store in exchange for a commission.” And for internet retailers, these tax laws could influence whether the retailer would want to do business in the state all together.

Read the article here: http://www.downloadsquad.com/2009/07/07/schwarzenegger-no-internet-sales-tax-in-california-please-stic/

23 04 2010
Small Business Resources in Washington. « The Company Line: BLOG

[…] Washington’s Reseller Permit […]

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