Did I Use My Resale Certificate Appropriately?

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On My Honor, I Will Try…: So Glad I Used My Resale Certificate NY Appropriately

I had never heard of a resale certificate NY before. Honestly, I thought that a resale certificate was permission to sell land. Don’t laugh, we all try to scramble a definition together when we don’t know something. However, as we get older, it’s important to know exactly what you’re dealing with in life. When I think back on my time as a Girl Scout leader, there were many times when I had a resale certificate in hand and didn’t know it! I had my troop of girls along for a grocery trip. It was two days before our big Hershey Park Jamboree and I took them along for fun and to help carry those big packages of chocolate.  While doing research for this blog, I discovered I did indeed use the resale certificate appropriately. The Girl Scouts are a not-for-profit organization.

A Resale Certificate Can Only Be Used In Certain Situations

Resale certificates are known to lay persons as a tax exemption form. Yes, I was a lay person when I was taking care of my Girl Scout troop. It felt a little odd that the cashier wanted to retain the certificate, but now I understand she was just doing her job as well, I was the novice in the situation. According to the New York State Department of Taxation and Finance, a Resale Certificate is synonymous with an Exemption Certificate for Sales Tax. In short, resale certificates are used when you as a purchaser are trying to acquire property or services that you plan to resell. At that point sales tax would be added to the good or service. As a result, when you initially make the purchase, you are not subjected to sales tax. This is how the government avoids double taxation. Again, so glad those marshmallow purchases were legitimate!

There are three ways that a resale certificate is used:

  • It is the intention of the purchaser to resell the property or service
  • You, as the purchaser have the intention to use the property or service for a purpose that is exempted from sales tax collection
  • The purchases are made by an agent or employee of the tax-exempt, nonprofit organization or government entity.

Always Understand The Document In Hand  

Those Girl Scout days are long past and most likely I will not have the need for another resale certificate, however it is always good to know what document you have when you’re using it. It’s a good idea to make certain that the resale certificate is properly filled out and that you have a clear understanding of what your role is as purchaser.