Georgia Resale Certificate: A tax resale certificate is a legal tax form that is provided to a supplier by a business in order to purchase inventory, free of tax (assuming that the business is reselling the inventory to the customers). In other words, if a business or a proprietor has the proper documentation, they can easily avoid paying sales tax on their purchases. This will have significant financial implications for the parties involved.
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What is a Georgia Resale Certificate?
As stated above, a resale certificate is a tax form that enables a business to purchase inventory free of tax. In the state of Georgia however, a business does not need to be registered with the state to apply for a resale certificate.
Why do you need a Georgia Resale Certificate?
A resale certificate has tremendous benefits as it legally allows businesses not to pay tax if they purchase an inventory. However, do keep in mind that some states require you to apply for a sales tax permit in their state to get a resale certificate. In this article, we shall focus on the state of Georgia and their prerequisites needed to apply for a resale certificate.
Georgia Resale Certificate – Important Note
Some suppliers are not knowledgeable regarding the use of resale certificates and may reject buyers when they present an out-of-state resale certificate. Often, these suppliers require their customers to apply for in-state sales tax permits even if they are not legally required to do so. In such cases, you can show the supporting state statutes in order to the suppliers to comply. Also, the resale certificates may expire and a new one is to be renewed every five years. The period of validity may vary from state to state.
Georgia Resale Certificate – How to get a Resale Certificate?
Do note, it is not mandatory to be registered with the state in order for a resale certificate. However, the business will need the Multistate Tax Commission’s Uniform Sales and Use Tax Certificate. In case you need to register in the state of Georgia, the Georgia Certificate of Exemption (ST-5) will need to be filled.
Georgia Resale Certificate Application Form
Following is the Georgia Certificate of Exemption (ST-5) form that needs to be filled in order to get a resale certificate.
| A copy of a GEORGIA STATE SALES TAX CERTIFICATION OF EXEMPTION To: (Supplier) (Supplier’s address) THE UNDERSIGNED HEREBY CERTIFIES that all tangible personal property purchased or leased after this date will qualify for tax-free or tax-exempt treatment as indicated below. (Check the Applicable Box) Purchases or leases of tangible personal property or services for RESALE ONLY. O.C.G.A. § 48-8-30. A sales and use tax number is required unless the purchaser is one of the following: church, qualifying tax-exempt child caring institution, tax-exempt parent-teacher organization or association, private school (grades K-12), nonprofit entity raising funds for a public library, member councils of the Boys Scouts of America or Girl Scouts of the U.S.A. TAX-FREE TREATMENT DOES NOT EXTEND TO ANY PURCHASE TO BE USED BY THE PURCHASER, INCLUDING ITEMS THE PURCHASER WILL DONATE. O.C.G.A. §§ 48-8-3(15), (39), (41), (56), (59), (71). Purchases or leases of tangible personal property or services made by the United States government, the state of Georgia, any county or municipality of this state, fire districts which have elected governing bodies and are supported in whole or in part by ad valorem taxes, or any bona fide department of such governments when paid for directly to the seller by warrant on appropriated government funds. A sales and use tax number is not required for this exemption. O.C.G.A. § 48-8-3(1). Sales of tangible personal property and services made to the University System of Georgia and its educational units, the American Red Cross, a Community Service Board located in this state, Georgia Department of Community Affairs Regional Commissions, or specific qualified authorities provided with a sales tax exemption under Georgia law. A sales and use tax number is not required for this exemption. O.C.G.A. §§ 37-2-6.1(d), 48-8-3(8), 50-8-44. The sale, use, consumption, or storage of materials, containers, labels, sacks, or bags used for packaging tangible personal property for shipment or sale. Materials purchased at a retail establishment for consumer use are not exempt. A sales and use tax number is not required for this exemption. O.C.G.A. § 48-8-3(94). Aircraft, watercraft, motor vehicles, and other transportation equipment manufactured or assembled in this state when sold by the manufacturer or assembler for use exclusively outside this state and when possession is taken from the manufacturer or assembler by the purchaser within this state for the sole purpose of removing the property from this state under its own power when the equipment does not lend itself more reasonably to removal by other means. A sales and use tax number is not required for this exemption. O.C.G.A. § 48-8- 3(32). The sale of aircraft, watercraft, railroad locomotives and rolling stock, motor vehicles, and major components of each, that will be used principally to cross the borders of this state in the service of transporting passengers or cargo by common carriers and by carriers who hold common carrier and contract carrier authority in interstate or foreign commerce under authority granted by the United States Government. Replacement parts installed by carriers in such aircraft, watercraft, railroad locomotives and rolling stock, and motor vehicles that become an integral part of the craft, equipment, or vehicle are also exempt. The exemption does not extend to private or contract carriers. O.C.G.A. § 48-8-3(33)(A). Purchases or leases of tangible personal property or services made by the Federal Reserve Bank, a federally chartered credit union, or a credit union organized under the laws of this state. A sales and use tax number is not required for this exemption. 12 U.S.C. §§ 531, 1768 § 1768; O.C.G.A § 48-6-97. Under penalties of perjury, I declare that I have examined this certificate and, to the best of my knowledge and belief, this certificate is true and correct and made in good faith, pursuant to the sales and use tax laws of the State of Georgia. Further, I understand that any tangible personal property obtained under this certificate is subject to sales and use tax if the purchaser uses or consumes the property in any manner other than indicated above. Name of the Purchaser: Sales Tax Number: Purchaser’s type of business: Purchaser’s address: Printed Name and Signature: Title: Email: A supplier must secure and maintain one properly completed certificate of exemption from each purchaser making purchases without the payment of tax |
FAQ’s on Georgia Resale Certificate
Question 1.
What is a Georgia Resale Certificate?
Answer:
A Georgia Resale Certificate is a type of certificate that enables a business to purchase inventory free of tax (provided they are reselling it to the customers).
Question 2.
What is the need for a Georgia Resale Certificate?
Answer:
For a business, a resale certificate has tremendous benefits as it legally allows businesses not to pay tax when they purchase an inventory.
Question 3.
How do I apply for a Georgia Resale Certificate?
Answer:
One needs to apply for the Georgia Certificate of Exemption (ST-5) form to get a resale certificate in the state of Georgia. However, it is not mandatory to be registered with the state, though you will need a Multistate Tax Commission’s Uniform Sales and Use Tax Certificate instead.