Do you need to fill out a separate Sales and Use Tax Resale Certificate for every single transaction?

Question

I just got my Texas taxpayer number to conduct business. To purchase items wholesale from suppliers I need a Tax Resale Certificate, which I know can be downloaded from the Texas website. My question is, do you need one for each and every transaction with each and every vendor? I know that these are not filed with the Comptrollers office, but I am unsure as to what happens with them afterwards and whether or not I need to have one for each purchase or does one simply provide one copy to each vendor?

Answer 1

No.  You need to give a resale certificate to each vendor from which you buy for resale.  Thereafter they should sell it to you tax-free and if you use any of the items for personal use, then you report it on a line on the tax form so that use tax is added to your sales tax due for the month or quarter.

When a vendor is audited, the auditor will look at his tax-free sales and verify that he has a resale certificate.  If they audit you, they would check to see if you are incorrectly buying taxable items and claiming they are for resale.  

If you sell to an 'exempt organization' you need to obtain an 'exemption certificate,' NOT a resale certificate.

If you use supplies in performing a service, that does not constitute buying for resale and tax is due on such purchases.

You do not need to file resale certificates with the comptroller.

Answer 2

Wholesalers will either want certification that you have the number or a photocopy of your certificate.