How to Get a Resale Certificate in Maine 2023 - How to Start my LLC

How to Get a Resale Certificate in Maine

Written by:

Carolyn Young has over 25 years of experience in business in various roles, including bank management, marketing management, and business education.

Reviewed by: Sarah Ruddle

For over 15 years, Sarah Ruddle has been a noteworthy leader in the business and nonprofit world.

How to Get a Resale Certificate in Maine

How to Get a Resale Certificate in Maine

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

This guide lays out all you need to do to obtain a resale certificate in Maine. 

What Is a Resale Certificate?

If your LLC expects to sell tangible goods in Maine, 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 Maine, the penalty for tax fraud is repayment of the tax plus a 75% penalty. You could also be charged with a Class D or Class C crime, resulting in a fine of up to $5,000 and from one to five years of imprisonment. 

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 is invalid, making the vendor responsible for the sales tax. 

How to Obtain a Resale Certificate in Maine

Maine is slightly different from other states because you must project that you’ll earn $3,000 or more annually to be eligible for a resale certificate. 

When you register for your sales tax license, you’ll fill in your projected income, and if that amount is more than $3,000, you’ll automatically be issued a resale certificate.

You’ll register for your sales tax license with the Department of Revenue Services.

The resale certificate that you will be issued looks like this sample:  

image

Obtaining the certificate is free; you’ll receive it immediately if you qualify.

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

Does a Resale Certificate Expire in Maine?

Per the Revenue Services website:

Whether Resale Certificates are renewed depends on a review performed by Maine Revenue Services before the certificate expires. Those active retailers who have reported $3,000 or more in gross sales over the previous 12 months will have their Resale Certificate automatically renewed.

Each renewed Resale Certificate will be valid for four calendar years and expire on December 31st of the fourth year from the date of issuance. Retailers who do not meet the $3,000 gross sales threshold will not be eligible to receive a renewal of their Resale Certificate.

In Closing

In Maine, 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 unnecessary sales tax.