If you’re starting a limited liability company (LLC) in Wisconsin and planning to sell goods subject to sales tax, you’ll need 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 Wisconsin.
What Is a Resale Certificate?
If you expect to sell tangible goods through your LLC in Wisconsin, 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 Wisconsin, the penalty for tax fraud is repayment of the tax owed plus a $250 penalty which could result in a fine of up to $250,000 for an individual or $500,000 for a corporation and imprisonment of up to five years.
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 may refuse a resale certificate if it is invalid, which would make the vendor responsible for the sales tax.
How to Obtain a Resale Certificate in Wisconsin
To obtain a resale certificate, known as an exemption certificate in Wisconsin, visit the Department of Revenue website to download the form.
Obtaining the certificate costs $20, and you can use the form 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 a Resale Certificate Expire in Wisconsin?
Wisconsin resale certificates do not expire. It’s a good idea to review them every few years to ensure the information is up to date.
In Wisconsin, 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 pay unnecessary sales tax.