Suppose you’re starting a limited liability company (LLC) in Louisiana 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 Louisiana.
What Is a Resale Certificate?
If your LLC expects to sell tangible goods in Louisiana, 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 Louisiana, the penalty for tax fraud is repayment of the tax owed plus interest and possibly a $1,000 fine and up to five years 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. Although a vendor might refuse a resale certificate if your certificate is invalid, the vendor would be responsible for the sales tax.
How to Obtain a Resale Certificate in Louisiana
To obtain a resale certificate in Louisiana, visit the Department of Revenue’s business services website.
Louisiana is one of the few states where you have to file your resale certificates with the state, so you’ll need to follow the application process for each vendor.
You’ll need to log in to your account on the site to fill out the application.
You’ll need the following information:
- The physical and mailing addresses of all your business locations
- The sales tax account numbers and NAICS code for all your business locations
- Your business’s resale inventory purchase amounts for the last two years
Once you fill out the form with the required information, you’ll apply.
Obtaining the certificate is free, and it should be filed and ready to print within two to three days.
Once you have the filed certificate, present it to your vendor and keep a copy for your records.
Does a Resale Certificate Expire in Louisiana?
When your resale certificate has been filed, you’ll be notified of its expiration date; however, your certificates will be renewed automatically as long as your business’s taxes, required filings, and reports of in-state sales are up to date.
Suppose a resale certificate does not automatically renew due to late tax payments or report filings. You’ll have 60 days from the expiration date to apply for renewal through your account on the Department of Revenue’s business services website.
In Louisiana, 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.