Audience: Businesses 

Contrary to what some people believe, a sales and use tax license is not a "tax number" that exempts you from paying sales and use tax.

To make tax-exempt purchases for items intended for resale or for property that will be incorporated into something you manufacture to sell, you must give the vendor a resale certificate. Do not confuse the resale certificate with the exemption certificate.

Resale Certificate

A resale certificate is a written statement that you provide stating that the merchandise or taxable service you buy will be resold in a taxable sale or that it will be incorporated into tangible personal property or used in a service that will be taxed when it is sold. Although there is no specific form for a resale certificate, it must include:

• a signed statement that the purchase is intended for resale,
• the purchaser's name and address, and
• the purchaser's Maryland sales and use tax registration number
  NOTE: Your sales and use tax registration number is an eight digit number that has been assigned to your business. You'll find your registration number on each sales and use tax return we send you and on your sales and use tax license.

If you frequently deal with the same supplier, you may provide that supplier with a blanket resale certificate stating that all purchases are for resale. Then all you have to do is give the supplier your sales and use tax registration number.

A resale certificate can be generated through the Maryland Tax Connect portal.

Record Keeping

Vendors must clearly document the reason for all tax-exempt sales and should keep resale certificates on file as part of your business records. You must be able to match your sales records with the appropriate resale certificates for audit purposes. You can be held liable for uncollected taxes if you accept resale certificates for sales that you know or should know are not for resale.

Purchases under $200

Resale certificates may not be used to make tax-free purchases for resale if the purchase is less than $200 and payment is by cash, check or credit card unless the seller delivers the goods directly to the buyer's retail place of business. However, you may present a resale certificate to make a tax-free purchase of goods for less than $200 if you are purchasing goods: (1) on credit by the seller; (2) which would be exempt even if not sold for resale; or (3) which are alcoholic beverages regulated by Article 2B of the Annotated Code of Maryland.

Purchases for Resale FAQs

Sales and Use Tax FAQs

Refunds from Purchases for Resale

Buyers may claim a refund for any tax paid on purchases for resale, using line 11 of their next sales and use tax return. No documentation is required with the return. Buyers may also apply directly to the Maryland Comptroller's Office for a refund.

To claim a refund for taxes you have paid:

• Keep invoices showing tax paid on purchases made for resale;
• Total the tax paid as you prepare your sales and use tax return; and
• Enter the amount on line 11 of the return up to the lesser of $1,000 or the amount due.

For expedited refunds, licensed Maryland retailers may submit a refund claim by fax using form ST212 to be faxed to 410-333-7744.