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

TL;DR

• Washington calls its resale document a reseller permit. The Department of Revenue issues it to qualified businesses.

• Buyers may use the permit for eligible inventory, ingredients, or components purchased for resale. Personal items, business equipment, and supplies do not qualify.

• Sellers may accept a permit copy or authorized exemption documentation. Without valid documentation, sellers must collect sales tax.

• Sellers may obtain the required documentation at the sale or within 120 days.

• A Washington reseller permit generally lasts four years. Contractors and certain newer or inactive businesses receive two-year permits. Misuse can trigger tax, interest, other penalties, and a penalty equal to 50% of the tax due.

What is a Washington reseller permit?

Washington calls its resale document a reseller permit. The Washington Department of Revenue issues the permit with a unique number, and the buyer gives a copy to each seller to support wholesale purchases. For current transactions, Washington does not use a buyer-completed resale certificate. The state’s former resale certificates apply only to wholesale sales made before January 1, 2010, under Washington’s reseller permit rules.

A reseller permit generally covers goods that you buy for resale without using first. Manufacturers may use one for ingredients or components incorporated into products for sale. Qualifying purchases can also include specified agricultural inputs and materials or contract labor for retail or wholesale construction, as described in the Department of Revenue guidance.

You cannot use the permit for personal purchases, giveaways, business supplies, or equipment that your business will use. The permit also does not cover items consumed while performing business activities, even when you bill those costs to a customer. Equipment rentals and purchases that qualify for another retail tax exemption require the appropriate documentation instead.

Dual-purpose purchases require you to consider whether your business principally resells or consumes the items. If your business expects to consume more than 50 percent, you should not give the seller a reseller permit for any portion. If your business principally resells the items, you may use the permit for the full purchase. You must then report deferred sales tax as use tax on any items your business consumes.

How do I get a Washington reseller permit?

Apply through My DOR after confirming that your business holds the required Washington licenses and endorsements. Contractors must also hold the applicable Department of Labor and Industries contractor’s license. In My DOR, open the Excise Tax Account panel and select “Apply for/view a Reseller Permit”.

After approval, keep the original permit and give a copy to each seller when buying qualifying items for resale. You may authorize employees to use copies, but you must train them to make qualifying purchases. Improper use can expose your business to tax, interest, penalties, and permit revocation under Washington’s reseller permit rule.

If your permit is missing or expired when you make a purchase, pay sales tax rather than using invalid documentation. When you later resell the item, you may claim the Taxable Amount for Tax Paid at Source deduction on your Washington return or request a refund from the Department of Revenue. Review the permit’s effective dates before each purchase and renew or reinstate it through My DOR.

Can a seller accept something other than a reseller permit in Washington?

Washington treats a sale as retail unless the seller obtains an accepted form of resale documentation. Under Washington’s reseller permit rule, the seller may retain a reseller permit copy, accept an authorized exemption certificate, or record the required exemption data.

A buyer required to register in Washington may provide a properly completed Streamlined Sales Tax Certificate of Exemption or another certificate authorized by the Washington Department of Revenue. The certificate must include the buyer’s Washington reseller permit number. A registered buyer cannot omit that number by using an exemption certificate instead of a permit copy.

A buyer not required to register in Washington may provide a properly completed Multistate Tax Commission Uniform Sales and Use Tax Exemption Certificate, Streamlined Sales Tax certificate, or another DOR-authorized certificate. Sellers may accept the MTC certificate only from buyers that do not need to register in Washington.

Those data elements are the purchaser's name and address, type of business, reason for exemption, Washington reseller permit number when applicable, the identification number required by the state where the sale is sourced, the state and country that issued that number, and the purchaser's signature if the seller uses a paper record.

A seller accepting an authorized certificate does not have to confirm whether the buyer must register in Washington. However, the seller may refuse the exemption when the documentation appears invalid or expired, the purchase does not appear intended for resale, or the seller suspects misuse. Without valid documentation, the seller must collect and remit retail sales tax.

Can an out-of-state buyer buy for resale in Washington?

An out-of-state buyer may make a tax-free purchase for resale, but the acceptable documentation depends on whether the buyer must register in Washington. A nonresident buyer that does not engage in business in Washington and does not need to register may provide a properly completed Multistate Tax Commission Uniform Sales and Use Tax Exemption Certificate or Streamlined Sales Tax Certificate of Exemption. The purchase must be for resale outside Washington under the state’s nonresident buyer rule.

The MTC certificate applies only when the buyer does not need to register in Washington. An eligible nonresident buyer may instead apply for a Washington reseller permit and give the seller a copy.

A buyer required to register in Washington should use a Washington reseller permit. The seller may also accept a properly completed Streamlined Sales Tax certificate or another certificate authorized by the Washington Department of Revenue, but the document must include the buyer’s Washington reseller permit number. Without acceptable documentation, the seller should collect Washington sales tax.

How does a seller verify a Washington reseller permit?

A seller can document a wholesale sale by keeping a copy of the buyer’s reseller permit. Compare the buyer’s business name and permit number with the sales record, and check the effective and expiration dates. Washington allows paper or electronic copies. A seller may refuse the exemption when a permit appears expired or invalid, the purchase does not appear intended for resale, or the seller suspects misuse.

Electronic verification can replace the permit copy when the seller records a verification for each customer at least once per calendar year. The Department of Revenue’s Business Lookup checks one permit, while its free Reseller Permit Verification Service checks multiple permits. Each verification shows the permit holder’s name and current status, along with the expiration date. Save a printout or exported verification record with the customer account. A recorded verification supports sales made within 12 months after the verification under Washington’s reseller permit rule.

A seller generally must obtain the permit copy or other authorized documentation at the time of sale or within 120 days afterward. For one order or contract billed more than once, the 120-day period begins with the first billing. If the seller cannot obtain valid documentation, the seller should collect and remit retail sales tax.

A separate 120-day window applies during an audit. After an auditor first provides wholesale sales review results identifying missing records, the seller generally has 120 days to obtain documentation or prove that the sales were wholesale through other evidence. Purchase orders, shipping instructions, and information about the buyer’s business can support that proof. The Department of Revenue provides additional seller verification guidance.

When does a Washington reseller permit expire?

A Washington reseller permit is generally valid for four years. Contractors and certain newer or inactive businesses receive two-year permits. The last two digits of the permit number show the year it expires.

You cannot apply for renewal more than 90 days before expiration. If the Department of Revenue will not renew the permit automatically, it sends the business a notice about 90 days before expiration.

An ownership change that requires a new tax registration also requires a new reseller permit. The former owner cannot transfer the existing permit to the new registration. A permit becomes invalid when the Department revokes the business registration, closes the tax reporting account, or the permit holder stops doing business.

How long must sellers keep Washington reseller permit records?

Keep documentation for every wholesale sale for five years after the date of sale. The Washington Department of Revenue requires these records to support the sale’s wholesale treatment during an audit.

You can retain a paper or electronic copy of the buyer’s reseller permit or authorized exemption certificate. If you verify permits electronically, preserve the Business Lookup printout or the exported record from the Reseller Permit Verification Service. Sellers that capture the required exemption data instead of a document should retain those data with the related sales records. Invoices, purchase orders, and shipping instructions can provide additional support for the transaction.

What happens if a Washington reseller permit is missing or invalid?

A seller without valid documentation owes retail sales tax on a transaction it reported as wholesale, which is $6,500 per $100,000 of unsupported sales at Washington's 6.5% state rate, before local tax. The Department of Revenue may also reclassify the sale from wholesaling to retailing for business and occupation tax purposes. Sellers can generally obtain documentation within 120 days after the sale. During an audit, sellers generally receive a separate 120-day period after the auditor provides the wholesale sales review results to obtain documentation or establish through purchase orders, shipping records, and other facts that the sale qualified as wholesale under Washington’s reseller permit rule.

A buyer that uses an invalid or revoked permit owes the unpaid tax, interest, and applicable penalties. Washington also imposes a penalty equal to 50% of the tax due, even when the buyer did not intend to evade tax. The 50% penalty applies to the buyer, not the seller.

The Department may waive the 50% penalty when circumstances beyond the buyer’s control caused the misuse. Relief may also apply when a buyer properly used the permit for dual-purpose purchases, and made a good-faith effort to report deferred sales tax. Personal use and ignorance of the permit rules do not support a waiver.

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

Frequently asked questions

Can I use a reseller permit for purchases that I might resell or consume?

Washington bases mixed-use purchases on your principal use. If your business consumes more than 50 percent of the items, you should pay sales tax on the full purchase. If your business principally resells the items, you may use the permit for the full purchase and report deferred sales tax as use tax on items you consume.

Can a seller accept resale documentation after the sale?

A seller may generally obtain valid documentation within 120 days after the sale. For one order or contract with multiple billings, the period starts with the first billing. A separate 120-day period may apply during an audit after the auditor provides wholesale sales review results. Documentation received later may require additional evidence connecting it to specific wholesale sales under Washington’s reseller permit rule.

What should a buyer do if its reseller permit has expired?

The buyer should not present an expired permit, and the seller may refuse to treat the purchase as wholesale. The buyer can pay sales tax and later claim a Taxable Amount for Tax Paid at Source deduction when reporting the resale. The buyer may instead request a refund from the Department of Revenue when eligible.

Can a remote seller accept a Washington reseller permit?

A remote seller may accept valid Washington resale documentation for a Washington wholesale sale. A Washington-registered buyer can provide its reseller permit or an authorized certificate containing its Washington reseller permit number. A buyer not required to register may use an authorized Streamlined Sales Tax or Multistate Tax Commission certificate when the applicable rules permit it. The remote seller’s own registration and collection duties remain separate from the buyer’s resale documentation.