If you have recently launched or are planning to launch a limited liability company (LLC) that will sell products or services, you may want to get a resale certificate, or several of them, before you start doing business, as this can save you a lot of time and money.
Unlike most other states, Mississippi does not have a specific resale certificate form. Instead, all retailers need to do is provide their sales tax permit number to the vendor they are making a purchase from. Businesses can obtain a sales tax permit number by completing a form online through the Mississippi Department of Revenue website.
What is a Resale Certificate?
If your LLC has a valid resale certificate, you can buy goods from a wholesaler without paying sales tax, though you may pay a use tax. Depending on the size of your business, this can save you tens of thousands of dollars each year.
The catch is that whenever you do use a resale certificate to purchase goods, you are legally bound to resell those items and collect sales tax when you do so. If you do not resell those items, or fail to collect sales tax, the punishment could be costly fines or potential jail time.
Keep in mind, each resale certificate, also known as a resale license, applies to a single vendor. This means you’ll need a resale certificate for each one of your vendors.
You cannot use a resale certificate to buy items you do not intend to resell, such as a new computer for your business. This would be tax fraud, a felony offense. You are only able to buy items tax-exempt if you are going to collect sales tax on them later.
Not all wholesalers will accept resale certificates, nor do they have to. They may choose not to because of the risk of expired or false certificates, which would put the wholesaler on the hook for the sales tax.
How to Apply for a Resale Certificate in Mississippi
In Mississippi, the sales tax permit also serves as a resale certificate that applies to all vendors.
The seller’s permit identifies you with your state as a collector of sales tax. If you sell tangible personal property or goods you are required to have a sales tax permit. In some states, even a service provider like a lawyer is required to have a sales tax permit and collect state sales tax.
The resale certificate applies to items that you buy for resale, or for parts that you buy to manufacture something for sale.
Does a Mississippi Resale Certificate Expire?
Mississippi does not issue resale certificates. However, the sales tax permit is a one-time registration and no formal renewal process is needed once your original application is approved.
In Mississippi, there’s no formal resale certificate process. Getting your sales tax permit can be a bit of a hassle, but in Mississippi it is an absolute necessity. So take the time to obtain one and provide it to each of your vendors to ensure full compliance with your state’s tax regulations.