How to Use the Multistate Tax Commission Resale Certificate

The Multistate Tax Commission Resale Certificate is a single form that lets you buy inventory tax-free across 36 states without filling out a separate exemption document for each one. You complete the certificate with your business information and your active sales tax registration number for each state where you’re claiming the exemption, then give it to your supplier. The seller keeps it on file as proof they weren’t required to collect sales tax on a resale purchase. The form itself is a downloadable PDF from the MTC website, last revised on October 14, 2022.¹

States That Accept the Certificate

Thirty-eight jurisdictions have told the MTC that a properly completed Uniform Sales & Use Tax Resale Certificate meets their requirements: Alabama, Alaska (through the ARSSTC remote seller program), Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, and Wisconsin.²

Several states are missing from that list, and the gap matters if you sell into them: Indiana, Louisiana, Massachusetts, Mississippi, New York, Virginia, West Virginia, and Wyoming. You’ll need each of those states’ own exemption forms. Five states have no statewide sales tax at all (Alaska, Delaware, Montana, New Hampshire, and Oregon), so the certificate is generally irrelevant there. Alaska appears on the accepting list only because its remote seller program collects on behalf of local jurisdictions.

State policies can change without the MTC being notified, so verifying with the relevant state’s revenue department before you rely on the form is worth a few minutes.³

State-Specific Limits Printed on the Form

Acceptance doesn’t equal unlimited use. Footnotes on the certificate itself narrow how it applies in many participating states, and overlooking them is one of the most common reasons a certificate gets rejected during an audit.

Colorado, Hawaii, Illinois, and New Mexico do not allow the MTC form to claim a resale exemption for taxable services; only tangible personal property qualifies. Arizona, Idaho, and Kansas limit the form strictly to resale and component-part purchases, blocking its use for any other statutory exemption. California and Connecticut note explicitly that the form works only as a resale certificate under their specific regulations, not as a general exemption certificate. Florida adds an extra step: even when a buyer submits the MTC form with a valid Florida Annual Resale Certificate number, the selling dealer must also obtain a resale authorization number directly from Florida’s Department of Revenue. Kentucky does not allow the certificate for resale exclusions on admissions. Kansas and several other states specifically prohibit contractors from using the form to buy building materials tax-free.²

Whose Registration Number Goes on the Form

The single biggest source of trouble with the MTC certificate is the registration number field. Some states require the buyer to be registered to collect sales tax in that specific state before the resale exemption applies. Other states will accept a registration number from any state, typically the buyer’s home state.³

Roughly ten states take the strict approach and demand their own registration number. If you’re expanding into a state and haven’t yet registered there, handing a seller the MTC form with only a home-state ID gives the seller no protection when an auditor reviews the transaction. Verify each state’s rule before you rely on out-of-state credentials.

Filling Out the Certificate

The form is a fillable PDF from the MTC website.¹ Completing it correctly turns on five pieces of information:

Your legal business name and address as registered with taxing authorities.
A description of your business (retail, wholesale, manufacturing, and so on) that shows why you’re buying goods for resale rather than personal use.
A clear description of the property being purchased. Vague entries like “various goods” invite scrutiny. List actual product categories.
Your sales tax ID for each state where you’re claiming the exemption. The form has a table of accepting states; check the box next to each one where you’re registered and enter the ID number. Every number must be current and active on the date of the transaction.
Your signature and the date. You’re signing under penalty of perjury that the information is true and that the items will be resold in the ordinary course of business.

An expired permit number, a blank registration field for the relevant state, or a missing signature makes the certificate invalid. A seller who accepts a facially incomplete form loses the good-faith protection that would otherwise shift liability to the buyer, so sellers routinely reject certificates that aren’t fully filled in. Check the whole form before you send it.

Single Purchase or Blanket Certificate

The form has a box that lets you designate the certificate as a blanket certificate covering all future qualifying purchases from the same seller, rather than the single transaction described on the form. If you buy the same categories of goods from a vendor regularly, checking that box means the certificate stays on file and applies to every eligible order going forward.

A blanket certificate stays effective as long as you have a continuing business relationship with that seller, generally meaning at least one transaction within the prior twelve months. You need to give the seller an updated certificate if your address, tax ID, or business type changes, and sellers can request an updated version at any time. For one-off purchases from a supplier you don’t expect to use again, a single-purchase certificate is fine. If there’s any chance of reordering, the blanket option saves paperwork on both sides.

Handing the Form to the Seller

The buyer gives the completed certificate directly to the seller. No agency processes it. It’s a private record between the two businesses that tells the seller: don’t charge sales tax on this order, because I’m buying to resell. The seller files the original or a copy as documentation for why tax wasn’t collected on that sale.¹

Keep your own copies of every certificate you issue. If a supplier loses their copy and gets audited, yours is the backup. Your files also tell you which vendors are holding which of your state IDs, which matters when a permit number changes and you need to send out updates.

Sellers must retain resale certificates for their state’s audit window, generally three to four years from the end of the calendar year of the transaction, sometimes longer for suspected fraud. Electronic copies are acceptable in most jurisdictions as long as they’re legible and complete.

What the Certificate Doesn’t Cover

A resale certificate applies only to items you’ll actually resell to a customer. It doesn’t cover anything you’ll use in your own operations, consume personally, or hold as an investment. If the item ends up in your hands rather than a customer’s, it wasn’t a resale purchase.

Common misuses include office supplies, equipment, and fixtures bought tax-free with a resale certificate when the buyer plans to use them internally. Promotional giveaways, samples the buyer consumes, and goods incorporated into real property during construction generally fall outside the resale exemption as well. Kansas and several other states specifically prohibit contractors from using the MTC form to buy building materials tax-free.²

Penalties for Misuse

Knowingly using a resale certificate to avoid tax on items you plan to keep is a misdemeanor in most states. Beyond the criminal exposure, you become liable for the full sales tax that should have been paid, plus a penalty commonly set at 10 percent of the unpaid tax or a flat dollar minimum, whichever is greater. Interest accrues from the date of the original purchase.

If you also fail to self-report the use tax owed on the improperly purchased goods, negligence or fraud penalties can stack on top, sometimes reaching 25 percent of the unpaid tax for intentional fraud. In severe cases a state may revoke your sales tax permit entirely, ending your ability to make any tax-exempt purchases.

Drop-Ship Situations

Drop shipping puts three parties in one transaction: a retailer sells to a customer, then directs a manufacturer or distributor to ship the goods directly to the customer. The retailer never handles the product. The question for the drop shipper is what resale certificate protects them from collecting tax.

Some states let the drop shipper accept a resale certificate from the retailer even if the retailer isn’t registered in the destination state. Georgia accepts a purchaser’s home-state registration number when the buyer is located outside Georgia, has no nexus there, and the goods are drop-shipped to a Georgia customer. Tennessee similarly accepts the MTC form with an out-of-state registration number for drop-shipped sales.²

About ten states require the retailer to hold that specific state’s registration number, either on the MTC form or on the state’s own form, before the drop shipper can treat the sale as exempt. If you’re the drop shipper, don’t assume the MTC certificate with a home-state ID will hold up in a strict state. Confirm the destination rules before shipping without collecting tax.

When the MTC Form Isn’t Enough

The MTC certificate is not the only multi-state resale form. The Streamlined Sales Tax Governing Board maintains its own Certificate of Exemption accepted by SST member states. Some states accept both forms; others accept only one.³ Indiana, West Virginia, and Wyoming accept the SST certificate but don’t appear on the MTC form. If your sales reach into those states, you’ll need the SST form or the state’s own exemption document alongside the MTC certificate.

One more limit worth stating plainly: the MTC form is a documentation tool, not a substitute for state registration. Before you can legitimately claim a resale exemption in a state, you need a valid sales tax permit, either from that state or (where the state allows) from your home state. Letting a registration lapse invalidates any certificate carrying that state’s ID number. Colorado, for example, requires biennial renewal; other states leave permits active as long as you keep filing returns. If an auditor pulls your registration number and finds it inactive on the date of a transaction, the exemption fails and the tax is owed.³

1
Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate
2
Multistate Tax Commission. Uniform Sales and Use Tax Resale Certificate (Revised October 14, 2022)
3
Multistate Tax Commission. FAQ – Uniform Sales and Use Tax Certificate Multijurisdictional