Texas Resale Certificate: How to Apply and Use Form 01-339
TL;DR
A Texas resale certificate lets a buyer purchase taxable items for resale without paying sales tax, while a Texas sales tax permit authorizes a business to collect and remit the tax.
The Comptroller issues the permit, but the buyer completes the free Form 01-339 and gives it to the seller.
A buyer may use the resale certificate for items it will resell, rent, or lease. Business supplies and equipment do not qualify.
Texas charges no fee for the permit or the downloadable certificate form.
A blanket certificate remains effective until the buyer revokes it in writing. A certificate tied to a pending permit application lasts 60 days.
The comparison table and checklist below summarize the documents and required actions.
Texas sales tax permit vs. resale certificate: what's the difference
A Texas sales tax permit authorizes a business to collect and remit Texas sales tax, while a resale certificate lets a buyer purchase qualifying inventory tax-free for resale. One document cannot substitute for the other.
The Comptroller requires a permit when a legal entity is engaged in business in Texas and sells taxable goods or services. Certain out-of-state businesses must also register when their Texas revenue reaches $500,000 during the preceding 12 months.
The Comptroller issues the permit after registration. The permit belongs to the registered business and cannot be transferred to a new owner.
By contrast, the buyer prepares the Texas Sales and Use Tax Resale Certificate. Form 01-339 combines a resale certificate and an exemption certification in one PDF. A buyer using the resale portion describes the items purchased and certifies that it will resell, rent, or lease them.
The permit application carries no fee, although the Comptroller may require a security bond. The Comptroller does not publish a guaranteed processing time. Estimates of two to four weeks do not represent official guidance.
Who qualifies to use a Texas resale certificate
A business may issue a Texas resale certificate when it holds a Texas sales tax permit, or has a qualifying permit application pending, and intends to resell, rent, or lease the specific items purchased.
The claimed resale must occur as part of the buyer's regular business activity. A retailer can purchase merchandise for resale, and a rental company can purchase property it will rent to customers. A buyer cannot issue a certificate for office supplies, machinery, equipment, or other property consumed in its own operations.
An out-of-state purchaser may enter its home-state retailer registration number on Form 01-339. A retailer based in Mexico may enter its Federal Taxpayers Registry number, commonly called an RFC. The official form warns buyers not to enter a federal employer identification number in place of a sales tax permit or retailer registration number.
The Comptroller also publishes Form 01-909, the Border States Uniform Sale for Resale Certificate, for qualifying transactions involving purchasers in Mexico or states that border Texas. Buyers and sellers should use the document that matches the transaction and the purchaser's registration status.
A certificate based on a pending Texas permit application remains effective for only 60 days. The buyer must provide the permit number to the seller when the Comptroller issues it.
How to apply for a Texas sales tax permit before requesting a resale certificate
A business can obtain a Texas sales and use tax permit without charge through the Comptroller's online registration system or by mailing Form AP-201.
First, determine whether the business must register. Registration generally applies when a business sells taxable property or services in Texas, rents or leases taxable property, or meets the economic threshold for remote sellers. A business may submit its application without a federal identification number.
For online registration, use the Texas Online Sales Tax Registration Application System linked through the Comptroller's permit FAQ. For a paper application, complete Form AP-201 and mail it to the address stated in the instructions.
Texas charges no permit application fee, but the Comptroller may require a security bond. Applicants should contact a Comptroller field office if the agency requests one.
A business needs a separate permit for each active place of business. The Comptroller generally treats a location as a place of business when it receives three or more orders for taxable items during a calendar year. [Source review needed: independently confirm this threshold against current Comptroller guidance or governing Texas authority before publication.] Separate locations receive outlet numbers under the same taxpayer identification number. A warehouse or manufacturing site does not qualify solely because the business stores or produces goods there.
Permit registration and Form 01-339 serve different purposes. The business applies to the Comptroller for its permit. The buyer later completes Form 01-339 and gives it directly to a supplier when making qualifying purchases for resale.
How to complete Texas Form 01-339 step by step
Form 01-339 contains separate resale and exemption sections, and a buyer purchasing inventory tax-free completes only the resale certificate section.
Use the current official Form 01-339 PDF and complete these fields.
Name the purchaser. Enter the legal or business name associated with the sales tax permit, followed by the phone number and address.
Enter the registration number. Provide the 11-digit Texas sales and use tax permit number. An eligible out-of-state retailer may provide its registration number, and a retailer based in Mexico may provide its RFC number. Do not substitute a federal employer identification number.
Describe the items. Identify the property being purchased for resale. Use enough detail to connect the certificate with the goods covered. A description may refer to item categories or an attached order when the reference clearly identifies the purchase.
Describe the buyer's business. State the type of business and the products or taxable services it normally sells, rents, or leases. The description helps the seller assess whether the claimed resale fits the buyer's regular operations.
Identify the seller. Enter the seller's name and full address. The seller does not issue the certificate and does not need to sign the purchaser's certification.
Sign and date the form. An owner, partner, corporate officer, or authorized agent should sign the certification and provide a title and date. The signature confirms that the buyer intends to resell, rent, or lease the described property.
Do not complete the exemption certification merely because the purchase will be resold. An exemption certificate covers purchases exempted for another legal reason, while the resale certificate covers property acquired for resale.
A blanket certificate may cover recurring purchases of the same general type. The buyer remains responsible for paying tax on items that do not qualify, even when the seller holds a blanket certificate.
What buyers must give suppliers and what sellers must keep
The buyer completes and signs Form 01-339 and gives it to the seller, and the seller retains the certificate instead of submitting it to the Comptroller.
The seller should obtain the resale certificate at the time of the transaction. The 90-day period applies after the seller receives written audit notice and governs the deadline for delivering certificates to the Comptroller, not the deadline for receiving a certificate from the buyer. A properly completed certificate must identify the buyer, seller, registration number, type of business, and property purchased for resale.
Texas permits sellers to keep records in paper or electronic form when the records remain accessible and can be produced for examination. The seller must retain accepted resale certificates for at least four years after the transaction date. The Comptroller's records guidance also requires permit holders to retain books, invoices, receipts, and other sales tax records for at least four years.
A seller should review the certificate for missing information and apparent conflicts. For example, a restaurant's attempt to buy office furniture for resale would not fit its stated business activity without further explanation.
Under 34 TAC § 3.285, a seller may rely on a certificate accepted in good faith. Good faith requires the seller to lack actual knowledge that the exemption is improper and to avoid accepting a certificate when the claimed resale is unreasonable on its face.
Does a Texas resale certificate expire
Texas does not issue an annually renewed resale certificate, and a blanket resale certificate remains effective until the buyer revokes it in writing.
The buyer prepares Form 01-339 rather than applying for a separately issued certificate. A blanket certificate can therefore support later qualifying purchases from the same seller without a new form for every order.
The Comptroller's resale guidance creates a special rule for buyers awaiting permit approval. A resale certificate issued while the buyer's Texas permit application is pending expires 60 days after the date of issue. Once the Comptroller approves the application, the buyer must give the permit number to the seller.
A buyer should provide a replacement certificate when its legal name, address, ownership, registration number, or purchasing purpose changes. Sellers should also confirm that the permit remains active when account information appears outdated or a transaction does not fit the buyer's stated business.
What happens when resale inventory is used instead of resold
A business that uses tax-free resale inventory rather than reselling it must report the taxable use and pay Texas use tax under the applicable valuation method.
Temporary use before resale generally creates tax based on the item's fair market rental value during the use period. [Source review needed: independently confirm the temporary-use valuation method against current Comptroller guidance or governing Texas authority before publication.] For example, a retailer that uses inventory as a demonstration unit before selling it may owe tax based on the value of that temporary use.
A permanent withdrawal generally creates tax based on the item's original purchase price. [Source review needed: independently confirm the permanent-withdrawal valuation method against current Comptroller guidance or governing Texas authority before publication.] Common triggers include giving inventory to an employee, taking merchandise for personal use, consuming products as business supplies, or keeping a display model instead of offering it for sale. Free samples can also create a taxable withdrawal when the business gives away property acquired under a resale certificate.
The business reports the taxable amount on the taxable-purchases line of its Texas sales and use tax return. The facts determine whether fair market rental value or original purchase price applies, so the business should document the item, use period, original cost, valuation method, and final disposition.
Taxwire combines buyer-side use tax accrual and filing with support from an in-house tax team. That combination can help a controller track inventory withdrawals and carry the taxable amount into the appropriate return workflow.
Penalties for misusing a Texas resale certificate
A buyer that intentionally or knowingly misuses a resale certificate may owe the unpaid tax, penalty, and interest, and Texas law can impose criminal liability.
The buyer remains liable when it uses a resale certificate to acquire an item tax-free and then uses the item in a manner that does not qualify for resale treatment. A seller can also become liable when it accepts a certificate in bad faith or knows that the claimed resale is false.
Under Texas Tax Code § 151.707, intentional or knowing misuse carries penalties based on the tax evaded. Less than $20 is a Class C misdemeanor. An amount of $20 or more but less than $200 is a Class B misdemeanor. An amount of $200 or more but less than $750 is a Class A misdemeanor. An amount of $750 or more but less than $20,000 is a third-degree felony. An amount of $20,000 or more is a second-degree felony.
Section 151.707 governs resale certificate misuse. Section 151.709 addresses failure to furnish a required report and should not be cited as the resale certificate offense.
Permit vs. resale certificate at a glance
The table compares the two documents so a buyer or seller can identify the required document quickly.
Question | Texas sales tax permit | Texas resale certificate |
|---|---|---|
Primary purpose | Authorizes collection and remittance of sales tax | Supports a tax-free purchase for resale |
Who creates or issues it | Comptroller issues it to the registered business | Buyer completes and signs it |
Fee charged | No | No. Form 01-339 is a free download |
Filed with the Comptroller | Yes | No |
Given to the seller | No | Yes |
Kept in seller records | No | Yes, for at least four years |
Annual expiration or renewal | No annual renewal | No for a blanket certificate. Partial exception for a certificate based on a pending permit application, which lasts 60 days |
Governing form | Online registration or AP-201 |
Checklist: applying for and using a Texas resale certificate
Completing this checklist in order takes a business through registration and proper use of a Texas resale certificate.
Confirm that the business must hold a Texas permit because of its Texas activities or remote-seller revenue.
Apply through the Comptroller's online registration system or submit Form AP-201.
Obtain a separate permit for each qualifying place of business.
Confirm that the planned purchase consists of property the business will resell, rent, or lease.
Download the current Form 01-339 from the Comptroller.
Gather the purchaser's permit or registration number, business description, item description, and seller information.
Complete only the resale section for an inventory purchase.
Have an owner, officer, partner, or authorized agent sign and date the form.
Give the completed certificate to the seller within the allowed period.
Keep a copy with the purchase order, invoice, and related inventory records.
Replace the certificate when material business details change.
Retain accepted certificates and supporting sales records for at least four years.
Accrue and report use tax when the business withdraws tax-free inventory for its own use.
FAQs
Texas businesses can use Form 01-339 without a fee, but the rules for blanket use, pending applications, and out-of-state buyers require specific treatment.
Is there a fee for a Texas resale certificate?
No. The Comptroller provides Form 01-339 as a free download, and the buyer completes it without applying for a separately issued certificate. Texas also charges no fee for a sales tax permit, although a security bond may be required.
Do I need a new certificate for each purchase or can I use a blanket certificate?
A blanket certificate may cover recurring qualifying purchases from the same seller. The certificate remains effective until the buyer revokes it in writing. Purchases outside the described resale activity remain taxable.
Can an out-of-state buyer use Form 01-339?
Yes. An eligible out-of-state retailer may enter its retailer registration number, and a Mexico-based retailer may enter its RFC number. Form 01-909 may apply to qualifying border-state transactions.
What is the difference between 01-339 and 01-339-S?
Form 01-339 is the English version, and Form 01-339-S is the Spanish version. Both cover Texas resale and exemption certifications.
Can I accept a certificate without a permit number?
A seller may accept a certificate from a Texas buyer with a pending permit application, but that certificate lasts only 60 days. The buyer must give the seller its permit number after approval. Different number fields apply to eligible out-of-state and Mexico-based buyers.
Does Texas require resale certificates to be renewed?
No annual renewal applies to a blanket resale certificate. The certificate remains effective until revoked in writing, while a certificate based on a pending permit application expires after 60 days.
Conclusion
Controllers and finance leaders should manage the sales tax permit and resale certificate as separate compliance obligations.
A designated owner should monitor permit status, review certificates before acceptance, retain supporting records, and document inventory withdrawals. The same owner should periodically compare internal procedures with current Comptroller forms and rules because registration requirements, filing procedures, and enforcement guidance can change.
Tax deadlines and penalty decisions should rely on the current Comptroller source and governing Texas law rather than an old form copy or secondary summary.
Reviewed by Graham Martin, CPA, Head of Tax at Taxwire.com.