Written by: Carolyn Young
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.
Updated on July 17, 2024
If you’re starting a limited liability company (LLC) in Pennsylvania and planning to sell goods subject to sales tax, 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 Pennsylvania.
If your LLC expects to sell tangible goods in Pennsylvania, 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 Pennsylvania, the penalty for tax fraud is repayment of the tax owed plus interest and possibly a $1,000 fine and a year 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. A vendor might refuse a resale certificate if your certificate is invalid, and the vendor would be responsible for the sales tax.
To obtain a resale certificate, known as an exemption certificate in Pennsylvania, visit the Department of Revenue website to download the form.
Obtaining the certificate is free; you can use it as soon as it’s filled out.
Once you have the certificate, present it to your vendor and keep a copy for your records.
Pennsylvania exemption certificates do not expire. It’s a good idea to review them every few years to ensure the information is up to date.
In Pennsylvania, a resale certificate is relatively easy to obtain yet provides significant savings. It will also help you and your LLC avoid potentially significant 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.
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