As a small-business owner, keeping expenses down is key to achieving the success you hope for. Taxes can be a significant expense for any business, and a North Carolina resale certificate can cut down on those costs. If your customers are going to pay sales tax on the items you sell, you aren't required to pay sales tax too.
North Carolina Resale Certificate
When you buy items with the intent to resell them, you are usually exempt from paying sales tax as long as you present the seller with a North Carolina Streamlined Sales and Use Tax Agreement Certificate of Exemption. Follow this process for obtaining and using the certificate:
- Create an account with the North Carolina Department of Revenue.
- Register your business with the North Carolina Department of Revenue by supplying your business name, EIN, Social Security number, address, phone number and basic business information.
- Wait to receive your North Carolina tax ID within five business days.
- Print form E-595E, North Carolina's Streamlined Sales and Use Tax Agreement Certificate of Exemption.
- Present a new copy of the North Carolina resale certificate to every vendor that sells your company products destined for resale.
There is no fee to register your business or use the North Carolina resale license, but companies must keep a copy of your certificate on hand, so make sure to fill out your information completely.
Who Needs a Resale Certificate?
Every business needs to register with the state of North Carolina if it meets any of these criteria:
- It sells goods or maintains a place of sales.
- It operates an office or official location of the business.
- It utilizes contractors, employees or any other official business representatives.
In addition to registering, any business owner in the state of North Carolina who buys goods intending to resell them needs a North Carolina resale certificate. A seller cannot let you buy items without paying tax unless you supply a certificate for the seller's records. This helps them be prepared in case of an audit and protects your business too.
Accepting a North Carolina Resale Certificate
If you operate a business in North Carolina, the chances are good that you will receive a North Carolina resale certificate from a customer at some point. This is true even if you don't operate a wholesale business because another business might buy resale goods from you when they run out or cannot find them elsewhere.
When you accept a North Carolina resale certificate, ensure that all the fields are filled out, particularly the tax ID number field. To be extra cautious, look up the tax ID number to ensure it is legitimate. Maintain a file dedicated to storing resale certificates and back up these files digitally in case of an audit.
Finding a Tax ID
If you lose your North Carolina Tax Identification Number, you can find it by logging on to your account with the North Carolina Department of Revenue. You can also locate your tax ID through searching the online Registry of Sales and Use Tax Numbers that is maintained by the North Carolina Department of Revenue. When you search for your business name, the search result includes your tax ID number. Use this same method to search for other businesses to verify their North Carolina resale certificates.
If you lose your North Carolina resale certificate, you can print another through the North Carolina Department of Revenue's website. Search for form E-595 E, and you are soon ready to fill out a new one for your next resale purchase.
- North Carolina Department of Revenue: Sales and Use Tax Forms and Certificates
- North Carolina Department of Revenue: Registry of Sales and Use Tax Numbers
- North Carolina Department of Revenue: Who Should Register for Sales and Use Tax?
- North Carolina Department of Revenue: Online Business Registration
- North Carolina Department of Revenue: Form E-595E