Kentucky Resale Certificate: How to Get, Use, and Accept One
TL;DR
A Kentucky resale certificate lets a buyer purchase property or services for resale without paying Kentucky sales tax. It also relieves the seller of proving the sale was exempt.
Kentucky buyers use Form 51A105 and must hold a Kentucky Sales and Use Tax Permit. Kentucky also accepts Form 51A260 and the MTC multijurisdiction certificate.
A blanket certificate has no expiration date. It stays valid while the buyer's operation stays the same and each purchase is the kind the buyer usually resells.
A seller has 90 days after a sale to obtain a fully completed certificate. It gets a second window of 120 days after a Department of Revenue request.
Sellers keep certificates for at least four years.
Knowingly misusing a resale certificate to evade tax is a Class B misdemeanor.
What is a Kentucky resale certificate?
A Kentucky resale certificate is a signed statement from a buyer that it is purchasing property or services to resell. It lets the seller skip collecting Kentucky's 6% sales tax on that sale. For example, a distributor buying inventory from a Kentucky manufacturer hands over a completed certificate, and the manufacturer invoices the order without tax. Kentucky has no local sales taxes, so 6% is the full rate on a taxable sale.
The certificate also moves the burden of proof off the seller. Under KRS 139.270, a seller that obtains a fully completed certificate within 90 days after the sale and keeps it on file is relieved of proving the sale was exempt.
If the buyer later uses the item in its own business, the tax falls on the buyer. Under KRS 139.290, Kentucky taxes that use as of the day the buyer first uses the item, measured by what the buyer paid. Holding the item for sale, demonstrating it, or displaying it does not count as use.
How do I get a Kentucky resale certificate?
Register for a Kentucky Sales and Use Tax Permit, then complete Form 51A105 and give it to each supplier. The certificate asks for the permit's account number. A new retailer placing its first inventory order therefore needs the permit before it can buy tax-free.
Register online at MyTaxes.ky.gov. Sole proprietorships and general partnerships first establish the business with the County Clerk. All other business structures register with the Kentucky Secretary of State before applying for tax accounts. Paper applications on Form 10A100 can take up to three weeks to process, and the Department of Revenue directs businesses to apply online instead.
Form 51A105 has no filing step. Download it, complete it, and give it to the seller, who keeps it on file.
A nonresident buyer that is not required to register in Kentucky can still issue Form 51A105. It writes on the face of the certificate that it is a nonresident purchaser not required to hold a Kentucky permit (103 KAR 31:111, Section 3).
Which Kentucky resale certificate form do I use?
Most buyers use Form 51A105, the Kentucky Resale Certificate. Kentucky's resale regulation also accepts two multistate forms (103 KAR 31:111, Section 2):
Form 51A260, the Streamlined Sales and Use Tax Agreement Certificate of Exemption.
The Multistate Tax Commission's Uniform Sales and Use Tax Exemption/Resale Certificate.
A buyer purchasing inventory for several states from one supplier can hand over a single multistate form instead of a separate Kentucky certificate.
Form 51A105 covers tangible personal property, digital property, and the taxable services listed in KRS 139.200(2)(d) through (ay). It applies when the buyer will resell, lease, or rent them in the regular course of business. It also applies when the buyer will use them in manufacturing or industrially processing property that will itself be resold.
Every certificate is either a single purchase certificate or a blanket certificate. A single purchase certificate itemizes what is being bought and covers that one purchase only. A blanket certificate gives a general description of what the buyer purchases for resale and covers repeat orders (103 KAR 31:111, Section 1).
What can a Kentucky resale certificate not be used for?
A Kentucky resale certificate cannot be used to buy accommodations, sewer services, or admissions. It also cannot be issued by contractors or anyone registered under a consumer number in the 900,000 series. Form 51A105 warns sellers directly that accepting a certificate from a 900,000-series account holder leaves the seller liable for the tax. When a subcontractor with a consumer account number offers a certificate on a lumber order, the seller should charge tax.
The certificate also cannot cover items the buyer will use in its own business. Form 51A105 requires the buyer to report and pay tax on any property bought under the certificate that it puts to use while holding it for sale. Retention, demonstration, and display are the only exceptions.
When is a seller protected after accepting a Kentucky resale certificate?
A seller is protected when it obtains a fully completed certificate within 90 days after the date of sale and keeps it on file (KRS 139.270(1)). Take a seller that ships an order on day one. If the certificate arrives on day 60, the seller is covered. If it arrives on day 120, the seller is outside the window.
A completed certificate must show four things (KRS 139.280):
The buyer's signature, name, and address.
The buyer's permit number.
The general character of what the buyer sells.
An electronic resale certificate does not need a signature.
The protection has limits. It does not apply to a seller that fraudulently fails to collect tax or solicits buyers to claim exemptions unlawfully. It also fails when the seller knew, or had reason to know, that the exemption information was materially false. The Department of Revenue bears the burden of proving that knowledge. When the seller complied and the buyer misused the certificate, the Department holds the buyer liable for the tax and may apply penalties (KRS 139.270).
When does a Kentucky resale certificate expire?
Kentucky sets no expiration date for a blanket resale certificate. It stays valid while the buyer's business and the kind of goods it buys for resale stay the same (103 KAR 31:111, Section 1). Consider a kitchen supply retailer that expands into commercial installation. It has changed the character of its operation, so its suppliers should collect a new certificate describing what it now buys for resale.
Each purchase under a blanket certificate must also be the kind the buyer usually buys for resale. A single purchase certificate covers only the purchase it itemizes, and later orders need a new certificate.
How long must sellers keep Kentucky resale certificates?
Sellers must keep Kentucky resale certificates for at least four years from the date the records are made, unless the Department of Revenue authorizes earlier destruction in writing (KRS 139.720). A certificate collected in March 2026 stays on file until at least March 2030.
Store each certificate with the customer and transaction records it supports. When the Department requests documentation during an audit, a seller that lacks a certificate has 120 days from the request to obtain one (KRS 139.270(3)).
What happens if a Kentucky resale certificate is missing or late?
A seller without a timely certificate owes Kentucky's 6% sales tax on the sale itself. That is $6,000 for every $100,000 of unsupported resale transactions. The seller gets two chances to avoid it (KRS 139.270):
Within 90 days after the sale, the seller can obtain a fully completed certificate.
Within 120 days of a Department of Revenue request during an audit, the seller can obtain either of the following:
A certificate for an exemption that existed on the sale date, could apply to the item, and is reasonable for the buyer's type of business.
Other proof that the sale was not taxable.
Kentucky's resale regulation shows where the line falls (103 KAR 31:111, Section 4). A restaurant's certificate for silverware that arrives after the 120-day period does not protect the seller, because the restaurant uses silverware in its own operation. A certificate from the same restaurant for disposable utensils, received during an audit, does protect the seller, because restaurants resell those items in the normal course of business.
Buyers carry risk too. Knowingly issuing a resale certificate for property the buyer does not intend to resell, to evade tax, is a Class B misdemeanor under KRS 139.990(1).
When a certificate review turns up prior periods where Kentucky tax went uncollected, Taxwire runs voluntary disclosure agreements, which typically cover a lookback of three to four years. Buyers that paid Kentucky tax on inventory can also recover it. Kentucky lets a retailer deduct the purchase price of property it paid tax on and then resold before using (KRS 139.290(3)), and Taxwire's tax recovery service reclaims that overpayment.
Frequently asked questions
Does Kentucky accept the Streamlined Sales Tax exemption certificate?
Yes. Kentucky's resale regulation lists Form 51A260, the Streamlined Sales and Use Tax Agreement Certificate of Exemption, as an accepted resale certificate. A multistate buyer can use it in place of Form 51A105 for Kentucky purchases.
Can a contractor issue a Kentucky resale certificate?
No. Contractors and other persons registered under a consumer number in the 900,000 series may not issue a resale certificate for any purchase. A seller that accepts one is liable for the tax.
Does an electronic Kentucky resale certificate need a signature?
No. Kentucky law waives the signature requirement when the buyer provides an electronic resale certificate. The certificate still needs the buyer's name, address, permit number, and the general character of what it sells.
Can an out-of-state buyer issue a Kentucky resale certificate?
Yes. A nonresident purchaser not required to register in Kentucky can issue a fully completed Form 51A105 or Form 51A260. On Form 51A105, it must note on the face that it is a nonresident purchaser not required to hold a Kentucky permit, and mark whether it is a single purchase or blanket certificate.