A Texas resale certificate documents an eligible purchase for resale so the supplier can accept it instead of collecting sales tax. It is not the sales tax permit itself. A permit registers a business for Texas sales and use tax; the sales tax permit guide explains who must apply.
Complete the resale side of Form 01-339 and give it to your supplier, not the Comptroller. A permit number or a copy of the permit alone does not replace a properly completed resale certificate, as the Comptroller's resale guidance explains.
One form, two pages, two jobs
Form 01-339 is a single document with two pages that do different things. Page one is the Texas Sales and Use Tax Resale Certificate. Page two is the Texas Sales and Use Tax Exemption Certification, a different claim made for a different reason. Open the official Form 01-339 (PDF) and fill in the side that matches your purchase rather than both.
The exemption side says a number is not required. That instruction does not apply to the resale side, which asks for the applicable purchaser registration number. Neither side makes a purchase exempt simply because the buyer fills it in; the purchase must qualify.
| Attribute | Sales and use tax permit | Resale certificate | Exemption certificate |
|---|---|---|---|
| What it is | The seller's own registration with the Comptroller | A buyer's statement that a purchase is for resale | A buyer's claim of some other exemption on a purchase |
| Who hands it to whom | Held by the business that registered | Given by the buyer to the supplier, not to the Comptroller | Also given to the supplier, never to the Comptroller |
| Number on it | An 11-digit permit number | The applicable Texas, out-of-state or Mexico registration number | No number required; the claimed exemption must still apply |
The permit is a business registration. The certificates document purchases and go to the supplier. A blanket resale certificate can cover repeat purchases in the circumstances described below.
What goes on the resale side
Everything the resale side asks for is aimed at a single purpose: letting the seller show, afterward, why no tax was collected. Work down the page in this order.
- Your legal name as shown on the permit, with your phone number and address.
- Your Texas Sales and Use Tax Permit Number where applicable; that field requires 11 digits. The form also provides a field for an out-of-state retailer's registration number or a Mexico-based retailer's Federal Taxpayers Registry (RFC) number. A Mexico-based retailer must also give the seller a copy of its Mexico registration form.
- The seller's name and street address.
- A description of the items being bought, or a reference to the attached order or invoice.
- A description of the business activity you generally engage in, or the type of items you normally sell.
- Your signature, your title and the date.
The finished certificate goes to the supplier. It is not mailed to the Comptroller of Public Accounts.
What the certificate covers, and what it does not
A resale certificate covers what you buy in order to sell it on. That takes in goods you will resell in the form you bought them, goods that become part of something else you sell, property you buy to lease or rent to a customer, and a taxable service performed on property you are holding in your resale inventory. It does not reach anything you buy to use yourself.
For example, consider a clothing shop buying dresses for resale and a steamer for use in the shop. The dresses are resale inventory; the steamer kept as store equipment is not covered by the resale exemption. If the owner takes a dress from inventory to wear, tax becomes due on that use. On a mixed order, clearly identify which items will be resold rather than treating the whole order as exempt.
Blanket certificates and where resale has to happen
You normally give a certificate for each purchase. There is one exception. If you buy from a supplier exclusively for resale, that supplier can accept a blanket resale certificate, one stating that all your purchases will be resold in the regular course of business. This does not cover a mixed purchasing arrangement in which some items are bought for the business's own use.
The resale side also fixes where the resale has to take place. The items have to be resold, rented or leased within the United States, its territories and possessions, or within Mexico. Resale in any other country falls outside what the certificate allows.
If you are the seller accepting one
A seller who takes a resale certificate takes on the job of showing later why tax was not collected, so the Comptroller's guidance puts a short list of duties on the seller.
- Make sure the certificate is properly completed before you rely on it.
- Note the general character of the buyer's business. Where the business would not normally sell the item being bought, question the certificate rather than take it.
- Do not accept a certificate if you know, or have reason to believe, that the property is being bought for something other than resale.
- Keep every resale certificate you accept in your records for four years, since it is your evidence that a sale was exempt.
Use the Comptroller's Sales Taxpayer Search to check whether a buyer's permit is active. An active permit tells you the buyer is registered and no more: it does not confirm that this particular purchase is for resale, which is the work the completed certificate does. For the wider rules behind all of this, see the Comptroller's questions and answers on resale certificates.
Where this sits
Getting the document right is mostly a matter of keeping the two sides of Form 01-339 apart and remembering who receives the finished page. The registration standing behind it, and the rest of what a new company has to file, run through the guide to what starting a business in the state actually involves, and the other subjects this publication covers are listed on this publication's home page.