Getting a resale certificate in New York is a must if you are a business owner from New York whose line of work involves purchasing items for resale.
With a New York resale certificate, you are able to buy items for your store without tax, as long as they are not being used for anything other than selling them to your customers.
In this article, we will answer all your questions related to getting a certificate, such as what it is in this context, how to get it, and most importantly, how to use it.
What Is a New York Resale Certificate and Why Is It Important for Your Business?
A business that has a New York resale certificate, also known as Form ST-120, will be able to purchase items intended to be resold free of New York state tax.
Also, this assumes that they are only purchased solely for resale purposes.
Any issued document is to be issued by the New York State Department of Taxation and Finance. They issue the document so that other suppliers of the business will have proof that enables them to claim that the purchase which they intend to make does not will not incur a tax charge according to sales tax law in that piece of land.
Correct use of this certificate can save you a lot of taxes and guarantee that you remain compliant with tax regulations in New York.
Who Needs to Use a Resale Certificate in New York State?
A reseller certificate is important for companies and people who acquire tangible personal property for resale. In New York, a resale certificate should be utilized if:
- You own or manage a retail shop in New York.
- You are a wholesaler who sells goods to other businesses.
- You run an online business or e-commerce website with taxable products.
- You take part in dropshipping sales that entail customers residing in New York.
If you do not have this certificate, vendors will apply sales tax to your purchases, even if the products are not for business use, which is not a final use.
Step-by-Step Process: How to Apply For and Get A New York Resale Certificate
1. Apply for a Certificate of Authority for Sales Tax in New York.
Your business must go through registration with the New York State Department of Taxation and Finance to obtain a Sales Tax Certificate of Authority. This certificate gives your business the right to collect state sales tax and to issue resale certificates.
For new businesses, we recommend using the New York Business Express Portal because it makes registering a new business easy.
2. Fill in the Official New York Resale Certificate Form (ST-120)
After getting your sales tax exemption, your next step is to complete ST-120, which is New York’s resale certificate form.
The following information is required to complete the form:
- The legal name of the business and the business address.
- New York Authority Certificate number.
- Information regarding the goods and services offered.
- A warranty that the goods being acquired are to be resold.
- The printed name, title, signature, and date.
The vendors do not have to submit this form to the state of New York, but they must keep it on record.
3. Provide Your Supplier or Vendor With Form ST-120
Once you have completed Form ST-120, make sure to give one copy to your vendor or supplier at the point of sale. By law, they must store this documentation in the event their file is selected for audit by the New York Department of Taxation and Finance.
Important: Do not send a copy of the resale certificate to the state. It is a pairwise document and only needs your supplier’s signature.
What Responsibilities Do You Have When Using A Resale Certificate From New York?
Using a resale certificate incorrectly can lead to penalties, including substantial fines, interest, and back taxes. New York business owners should be knowledgeable about:
Proper Usage
- Do not use it for personal purchases or purchases related to the business, such as office supplies or equipment.
- Use the certificate solely for purchasing goods meant for resale.
- Do not purchase items for personal use or internal business use (office supplies, equipment, etc.).
Recordkeeping
- Issue copies of civilian resale certificates to the vendors for record retention.
- Keep adequate copies of the purchase and maintain organized systems of record.
- Ensure your active Certificate of Authority is referenced and maintained.
Renewal and Compliance
- Follow New York State’s tax law and renew your Certificate of Authority upon expiration.
- Ensure all resale certificates are filled out and stored properly for audit defense.
Are Out-of-State Sellers Able To Utilize A New York Resale Certificate?
If you’re a business from out of state looking to purchase goods in New York or sell to customers in New York, this is what you need to understand regarding a resale certificate:
Nexus Requirements: If your business has a physical or economic presence (nexus) in New York, you may be required to collect and remit New York sales tax.
Out-of-State Certificates: Many suppliers in New York will not accept out-of-state resale certificates. You may need to register with the state and issue a New York resale certificate instead.
Drop Shipping: If you’re using drop shipping with New York-based vendors and customers, the rules can be complex. It’s best to consult with a tax advisor or formation expert to avoid compliance issues.
Why EasyFiling Is the Best One-Stop Solution for Your New York Resale Certificate
The process of obtaining a New York resale certificate by oneself could be overwhelming and take a lot of time. This is where EasyFiling steps in.
We provide:
✅Full service registration for New York Sales Tax Certificate of Authority
✅Help with the completion and submission of Form ST-120.
✅Sales tax compliance and resale certificate application strategies.
✅Rapid processing through an easy online system.
✅Tax registration services for domestic and international enterprises.
From new businesses looking to expand to those already operating in the country, it does not matter, as EasyFiling helps simplify the process and offers a cost-effective solution.
Conclusion
The New York resale certificate is indispensable for businesses engaged in purchasing and selling goods. It assists in making sure that the business isn’t losing money through excessive taxation and also ensures compliance with state tax laws.
As a retailer from New York or an out-of-state seller on an interstate e-commerce platform, compliance with the proper use of the resale certificate facilitates smooth business transactions.
Are you looking to set up your business brand? Resale certificates, Sales Tax Certificate of Authority, and a proper business structure are easily filed with EasyFiling.
Frequently Asked Questions (FAQs)
Am I required to have a business license to apply for a resale certificate in New York?
Yes, you need to have a New York resale certificate together with a Sales Tax Certificate of Authority from the New York State Department of Taxation and Finance. This automatically comes with a license to collect or pay sales tax, which in this case, sums up the prerequisites needed to fill in ST-120.
Is it possible to use a New York resale certificate for the purchase of office supply items as well as office equipment?
No, a resale certificate should only be used for items meant for resale. Purchasing goods for internal use, like office supplies, furniture, or business equipment, is considered abuse and will incur penalties and back taxes.
Is it possible to use a New York resale certificate in other parts of the country?
No, a New York resale certificate is only useful in New York State. It remains valid in other states only when you intend to buy goods that are meant for resale. In that case, you have to register separately and fulfill the conditions of the resale certificate in those states.
What is the expiry period for a New York resale certificate?
New York resale certificate does not have an official expiry date because Form ST-120 does not… However, your Sales Tax Certificate of Authority needs to be active for the resale certificate to be valid. If the business is closed or the authority is revoked, then you can’t use the resale certificate.
Can EasyFiling assist me in obtaining a resale certificate if I’m located outside New York?
Of course! EasyFiling helps domestic and foreign business owners register in New York, acquire a Sales Tax Certificate of Authority, and issue resale certificates correctly. No matter where you are, we ensure total compliance and a streamlined process.
Swostika Silwal
