How to Get a Resale Certificate in Maryland 

Suppose you’re starting a limited liability company (LLC) in Maryland and planning to sell goods subject to sales tax. In that case, you’ll need to get a resale certificate, or several of them, before doing business.   

But don’t worry; this guide lays out all you need to do to get a resale certificate in Maryland.

What Is a Resale Certificate?

If your LLC expects to sell tangible goods in Maryland, a resale certificate will enable you to purchase those goods without paying sales tax. This prevents your goods from being double taxed, as you will need to charge your customer’s sales tax when they buy the goods. 

If you purchase goods without paying sales tax and neglect to charge sales tax to customers who buy those goods, or if you fail to sell the goods, you and your LLC will be responsible for the sales tax and could face steep fines. 

If you purposely purchase an item not intended for resale, such as office equipment, and use your resale certificate to avoid paying sales tax, that’s tax fraud, a federal offense. In Maryland, the penalty for tax fraud is repayment of the tax owed plus interest and potentially a hefty fine and time served in prison. 

Each resale certificate applies to only one vendor, so you’ll need one for each vendor. 

Suppliers and vendors do not have to accept resale certificates. However, a vendor might refuse a resale certificate because if your certificate is invalid, the vendor would be responsible for the sales tax.

How to Obtain a Resale Certificate in Maryland

You have a few options to obtain a resale certificate in Maryland. Maryland does not have a specific form, so one option is to create your own.

It must contain the buyer’s name, business address, Maryland sales and use tax registration number, and a signed statement indicating that the purchase of tangible property or taxable service is intended for resale or will be incorporated into a product or service for sale. 

Alternatively, you can use a tool offered on the Maryland Comptroller’s website to generate a resale certificate.

Your third option is to use this blanket resale certificate for all purchases from each vendor. 

Once you have the certificate, present it to your vendor and keep a copy for your records.

Does a Resale Certificate Expire in Maryland?

Maryland resale certificates do not expire, but the state recommends that you review them every three years to ensure all information is up to date. 

In Closing

In Maryland, a resale certificate is relatively easy to obtain yet provides significant savings. It will also help you and your LLC avoid potentially substantial penalties. 

Be sure to present the correct certificate to your vendors and keep track of expiration dates so your certificates are always current. You don’t want to find yourself paying sales tax when you don’t have to.