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

How to Get a Resale Certificate in Utah 

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 Utah 

How to Get a Resale Certificate in Utah 

If you’re starting a limited liability company (LLC) in Utah 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 Utah.

What Is a Resale Certificate?

If your LLC expects to sell tangible goods in Utah, 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 Utah, the penalty for tax fraud is repayment of the tax owed plus a 100% penalty and possibly a $100,000 fine and 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. 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 Utah

To obtain a resale certificate, known as an exemption certificate in Utah, visit the Tax Commission’s website to download the form.

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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.

Does an Exemption Certificate Expire in Utah?

Utah exemption certificates do not expire as long as one purchase from the vendor occurs within 12 months. Therefore, you should keep track of purchase dates to maintain your current certificates.

In Closing

In Utah, an exemption 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.