Resale certificate

Sales tax is collected once, from the final consumer. When a retailer buys inventory to sell again, the purchase is exempt, and the resale certificate is how the buyer proves it. The buyer provides the certificate, the seller records the sale as wholesale and collects no tax, and the retailer collects tax when the goods are sold at retail.

Names and formats vary by state. Washington issues a state reseller permit through its Department of Revenue, valid for 4 years in most cases and 2 years for newer businesses or those with no recent reported income (WA DOR). Other states accept a signed certificate on a state form or the Multistate Tax Commission uniform certificate. A seller must know which documents its own state accepts.

The duty falls on the seller. Washington requires sellers making wholesale sales to obtain a valid reseller permit or other approved documentation from each buyer, allows up to 120 days after the sale to collect it, and requires the records to be kept for 5 years. Missing or invalid documentation lets the state reclassify the sale as retail and bill the seller for the tax (WA DOR).

For hemp wholesale, the resale certificate sits alongside the buyer's business license, any state hemp retailer registration, and the certificate of analysis for each lot shipped. It covers tax only; it does not establish that the buyer may lawfully sell hemp products.