Pennsylvania Resale Certificate: How to Get, Use, and Accept One

TL;DR

• Buyers claim resale under Reason 3 on Form REV-1220 and give the completed certificate to the seller.

• Pennsylvania gives sellers 60 days to possess the certificate. Afterward, sellers need other evidence or Pennsylvania may assess the sale as taxable.

• Pennsylvania sets no expiration date for a blanket REV-1220. A vendor may request a new certificate periodically.

• Keep each REV-1220 for at least four years from the date of the exempt sale it applies to.

• Unsupported sales create exposure of $6,000 per $100,000 at Pennsylvania's 6% state rate, and $8,000 in Philadelphia, where the 2% local tax applies.

What is a Pennsylvania resale certificate?

A Pennsylvania resale certificate lets you buy qualifying property or services without paying sales tax when you will resell or rent them in the ordinary course of business. You make the claim by selecting Reason 3 on REV-1220, Pennsylvania’s multipurpose exemption certificate, and entering your eight-digit Pennsylvania Sales Tax License ID.

Reason 3 covers goods resold in their original form. For example, a retailer may buy packaged merchandise tax-free when it will sell that same merchandise to customers. The exemption also covers property that becomes an ingredient or component of another product for resale, such as components a manufacturer builds into equipment it sells.

Purchases for your own business use do not qualify for the resale exemption. Office supplies, equipment, or other property that your business consumes remain taxable unless a different Pennsylvania exemption applies.

How do I get a Pennsylvania resale certificate?

A Pennsylvania resale certificate does not require a separate application or Department of Revenue approval. If Pennsylvania requires your business to register for sales tax, register online through myPATH's Pennsylvania Online Business Tax Registration service for a Sales, Use and Hotel Occupancy Tax License. The Department assigns an eight-digit License ID for use on resale certificates.

After registration, download the current REV-1220. Identify the purchaser and seller, select the appropriate certificate type, and choose Reason 3 for resale. Enter your eight-digit Pennsylvania Sales Tax License ID, then sign and date the form.

Deliver the completed certificate to the seller, not the Department of Revenue. The seller must possess it within 60 days after the sale.

A buyer without a Pennsylvania Sales Tax License can still claim resale on REV-1220 by explaining, in the “Other” section, why it is not required to hold one.

Which form is the Pennsylvania resale certificate?

Pennsylvania businesses use Form REV-1220, Pennsylvania Exemption Certificate, for resale purchases. The current revision is REV-1220 (TR) 07-23 (FI).

Select the Pennsylvania Tax Unit Exemption Certificate box for one transaction. Select the Pennsylvania Tax Blanket Exemption Certificate box when the certificate will cover multiple qualifying transactions with the same seller.

Provide the seller’s and purchaser’s names and addresses. Select one exemption reason, then complete the purchaser certification with the authorized signer’s name, title, signature, and date. Missing information can make the certificate void.

Choose Reason 3 when you will resell or rent the property or services in the ordinary course of business. Enter the eight-digit Pennsylvania Sales Tax License ID in the space provided. A buyer without that ID must use Number 8 to explain why Pennsylvania does not require one.

Reason 3 covers items resold in their original form. The exemption also covers property that becomes an ingredient or component of another product for resale. It does not cover supplies, equipment, or other property that your business consumes.

Give the completed REV-1220 to the seller. Do not return it to the Pennsylvania Department of Revenue. You may photocopy or reproduce the form, but a reproduction must contain the same information. REV-1220 cannot establish a tax license or exempt status, and it cannot register a vehicle.

Can an out-of-state buyer issue a Pennsylvania resale certificate?

Yes. An out-of-state buyer may claim a resale exemption when the purchase qualifies under REV-1220. A buyer without a Pennsylvania Sales Tax License can still claim resale on REV-1220 by explaining, in the “Other” section, why it is not required to hold one. The buyer should select Reason 3 and provide the requested explanation in place of a license number.

The MTC Uniform Sales & Use Tax Resale Certificate may serve as a Pennsylvania resale certificate subject to 61 Pa. Code §32.3. It cannot serve as a general Pennsylvania exemption certificate. The buyer should enter its eight-digit Pennsylvania license number or explain why it does not have one. Pennsylvania is not an SST member, so buyers should not treat SST certificate rules as Pennsylvania rules.

What makes a Pennsylvania resale certificate valid?

A valid certificate must disclose a proper exemption basis on its face. Pennsylvania requires an official exemption certificate or a substantial and proper reproduction. The buyer must date and execute it according to the instructions, complete all required information, and state a valid reason for exemption. For resale, the claimed purchase must fit Reason 3 on REV-1220.

A seller must accept the certificate in good faith to receive relief from tax liability. Good faith requires a properly completed certificate, no information the seller knows, or has reason to know, is false or misleading, and a purchase consistent with the buyer’s claimed exemption. For example, the buyer’s business activity and the type of property purchased should reasonably support resale. A seller that accepts a facially valid certificate in good faith generally avoids liability for collecting or paying tax on the covered sale under Pennsylvania’s exemption certificate regulation.

Pennsylvania gives sellers 60 days. After that, the seller must prove the exemption with evidence other than a certificate, or the sale is assessed as taxable. The seller must possess the completed REV-1220 by the 60th day following the sale and make it available for Department of Revenue inspection.

A blanket certificate does not make every later purchase automatically exempt. Pennsylvania treats each transaction covered by a blanket certificate as a separate exemption claim. The seller must review each purchase in good faith and collect tax when the item or service does not fit the buyer’s stated resale activity.

When does a Pennsylvania resale certificate expire?

Pennsylvania sets no expiration date for a blanket REV-1220. A vendor may ask for a new one periodically, because it only has to keep each certificate for four years from the date of the exempt sale.

A vendor’s request does not create a statewide expiration or renewal requirement. However, the seller must still review each purchase covered by a blanket certificate as a separate exemption claim.

How long must sellers keep Pennsylvania resale certificates?

Keep each REV-1220 for at least four years from the date of the exempt sale it applies to.

For a blanket certificate, calculate the retention period for each covered transaction based on that transaction’s sale date. Store the certificate with records that connect it to the applicable buyer and exempt sale so you can produce it during a Department of Revenue inspection.

What happens if a Pennsylvania resale certificate is missing or invalid?

A missing or invalid REV-1220 can leave the seller responsible for uncollected tax. The form instructions require the seller to accept a complete certificate in good faith. A certificate may fail when information is missing, the claimed exemption conflicts with the buyer’s activity, or the seller knows information is false.

Pennsylvania gives sellers 60 days. After that, the seller must prove the exemption with evidence other than a certificate, or the sale is assessed as taxable. Under Pennsylvania’s exemption certificate regulation, the seller must possess the certificate and make it available for inspection by the 60th day after the sale or lease.

The tax equals $6,000 per $100,000 of unsupported sales at Pennsylvania's 6% state rate, and $8,000 in Philadelphia, where the 2% local tax applies.

False statements can expose the person who made them to criminal and civil penalties. A false or fraudulent statement on an exemption certificate is a misdemeanor. Each conviction can bring up to one year in prison, a fine of up to $1,000, or both, plus prosecution costs. The rule applies to buyers, sellers, and their representatives. Pennsylvania law also provides severe civil penalties for certificate misuse, although the regulation does not state a fixed amount.

When a certificate review turns up prior periods where Pennsylvania tax went uncollected, Taxwire runs voluntary disclosure agreements, which typically cover a lookback of three to four years. Buyers that paid Pennsylvania tax on inventory they later resold can use Taxwire's tax recovery service to reclaim the overpayment.

Frequently asked questions

Does a blanket REV-1220 cover every purchase automatically?

No. A blanket certificate can cover multiple transactions, but the seller must evaluate each purchase separately and accept the exemption in good faith under Pennsylvania’s exemption rules. The purchased property or service must remain consistent with the buyer’s claimed exemption.

How does Pennsylvania apportion remotely accessed software?

A seller generally collects tax on canned software accessed by users in Pennsylvania. Pennsylvania presumes all users are in the state when the billing address is in Pennsylvania. A buyer with licenses used outside Pennsylvania can report the license counts under Reason 7 of REV-1220. Reason 7 handles apportionment, not resale.

Does economic nexus affect a remote seller’s obligations?

Yes. A remote seller exceeds Pennsylvania’s economic nexus threshold when its gross sales into the state exceed $100,000. A remote seller must register once its Pennsylvania gross sales exceed $100,000, measured by calendar year and counting sales through all channels, including nontaxable sales. Pennsylvania’s threshold is based on gross sales alone. Pennsylvania has never used a 200-transaction test.

Can a buyer use the MTC resale certificate in Pennsylvania?

Yes, for resale only. Pennsylvania treats the MTC Uniform Sales and Use Tax Resale Certificate as a resale certificate, subject to Pennsylvania rules. The buyer should provide its eight-digit Pennsylvania license number. A buyer without one must explain why it is not licensed. The MTC form does not serve as a general exemption certificate.

Can other evidence support an exemption without a certificate?

Yes. A seller may document that the item was not taxable property or a taxable service. Government customer records may support qualifying sales to the United States, Pennsylvania, or their subdivisions. Delivery records may support property delivered outside Pennsylvania for use outside the state.