How to Get a Resale Certificate in Arkansas 

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

This comprehensive guide explains why you need a resale certificate and how to get one in Arkansas.

What Is a Resale Certificate?

If your LLC expects to sell tangible goods in Arkansas, 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 don’t pass it on to the state. 

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 Arkansas, the penalties include paying back all the sales tax owed and possible fines and 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 if it proves to be invalid, which could make the vendor responsible for the sales tax.

How to Obtain a Resale Certificate in Arkansas

In Arkansas, a resale certificate is called an exemption certificate. To obtain an exemption certificate in Arkansas, you’ll need to visit the Department of Finance and Administration website to download the form.

The exemption certificate is simple to fill out.

Once you have the certificate, you’ll present it to your vendor. Be sure to keep a copy for your records.

Does a Resale Certificate Expire in Arkansas?

Exemption certificates in Arkansas expire unless used within 12 months. Otherwise, they do not expire, although it’s often a good idea to update them every few years.  

In Closing

Obtaining a resale certificate in Arkansas is relatively easy, will save you money, and will help you and your LLC avoid potentially significant penalties.  

Be sure to present the correct certificate to your vendors, keep copies for your records, and track expiration dates on unused certificates. You don’t want to pay unnecessary sales tax.