If you run an Ecommerce or CPG business in Arizona, securing an Arizona Resale Certificate is a smart move to protect your margins and streamline operations.
This certificate allows you to purchase inventory and raw materials tax-free, helping you lower upfront costs, stay competitive in pricing, and remain compliant with Arizona sales tax laws.
Understanding Resale Certificates in Arizona
What is an Arizona Resale Certificate?
In Arizona, a Resale Certificate is a document issued by the Arizona Department of Revenue (AZDOR) that allows businesses to:
- Purchase goods without paying sales tax, provided these goods are intended for resale to their customers in the normal course of their business.
- Make tax-exempt purchases of inventory and materials that will become part of the products they sell by presenting a valid resale certificate to their suppliers.
The purpose is to prevent double taxation, first at the wholesale level and then again at the point of retail sale.
However, an Arizona resale certificate is not a blanket exemption from all sales tax obligations. Businesses are still required to collect and remit sales tax on taxable sales to end consumers.
Why do you need an Arizona Resale Certificate?
Obtaining a resale certificate in Arizona offers several significant advantages for businesses that purchase goods for resale.
Here are some key benefits:
- Avoid Paying Sales Tax on Inventory: The most direct benefit is purchasing inventory and materials that will be resold to customers without paying Arizona’s sales tax upfront.
- Maintain Competitive Pricing: By not paying sales tax on the cost of goods, businesses have more flexibility in setting competitive prices for products in the Arizona market. This can be a crucial advantage, especially in price-sensitive industries.
- Legal Compliance: Possessing and using a valid resale certificate for eligible purchases ensures businesses comply with Arizona’s sales tax laws and regulations to avoid penalties. Crucially, vendors must keep copies of valid resale certificates on file to justify why they did not collect Transaction Privilege Tax (TPT) on a particular sale. This shifts the burden of proof to the purchaser if the exemption is later questioned by the AZDOR.
In Arizona, the specific form required for a resale certificate is the Form 5000A. Note that this form is not the same as the Form 5000.
The Form 5000 is a broader exemption certificate. It can be used by certain qualified individuals, agencies, or non-profit organizations. That’s why businesses should not use this form for general resale purposes.
When filling out Form 5000A, a purchaser must include their Arizona Transaction Privilege Tax (TPT) license number to identify that it is registered with the AZDOR and authorized to make tax-exempt purchases for resale.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
An Arizona Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. Note that in Arizona, a sales tax permit is called a Transaction Privilege Tax (TPT) license.
On the other hand, you can use the Arizona Resale Certificate (Form 5000A) to purchase goods tax-free from suppliers if you intend to resell those goods. To use a resale certificate, you must have an active sales tax permit.
Who Can Use a Resale Certificate in Arizona?
Businesses that purchase goods for resale can use an Arizona Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Arizona Sales Tax Permit.
How to Get a Resale Certificate in Arizona: A Step-by-Step Guide
Getting a resale certificate in Arizona is simple, but you’ll need to meet a few key requirements first. Here’s how to do it:
1. Make Sure You’re Eligible: Your business must sell taxable goods or services and be registered with the Arizona Department of Revenue (AZDOR). Only businesses with a valid Arizona TPT License can use a resale certificate.
2. Get an Arizona TPT License: If you don’t already have one, apply for an Arizona TPT License through the AZDOR website. You must obtain this permit before you can use the state’s resale certificate.
Need help? Read our blog: How to Get a Seller’s Permit in Arizona
3. Provide a Valid Sales Tax Permit License: To use an Arizona Resale Certificate (Form 5000A) for purchases made in Arizona, your business should have an active Arizona Transaction Privilege Tax (TPT) license. This TPT license number is a mandatory field on Form 5000A and signifies that your business is registered with the AZDOR to collect and remit TPT on your subsequent taxable sales.
For Out-of-State Purchases: Businesses outside of Arizona without a sales tax nexus in the state do not need an Arizona TPT License. Instead, you can present a valid resale certificate or sales tax permit from your home state to Arizona vendors. If your business has a TPT nexus in Arizona, you must register for an Arizona TPT license. This is necessary to make tax-exempt purchases for resale in the state using Form 5000A.
4. Gather Your Business Information: You’ll need basic business details to complete the resale certificate, including:
- Your business legal name and any trade names.
- Your business address and contact information.
- Your Federal Employer Identification Number (FEIN) or Social Security Number (SSN) if you’re a sole proprietor.
- Your Arizona TPT license number (if already obtained)
- Your business type (e.g., sole proprietorship, LLC, corporation).
5. Complete the Form 5000A: Download and fill out the Arizona Resale Certificate (Form 5000A) from the AZDOR’s website. You’ll present this form to your suppliers when making tax-exempt purchases.
6. Submission: No submission required in Arizona. You don’t submit the resale certificate to the state. Instead, give the completed form directly to your suppliers when buying items for resale.
7. Pay Any Applicable Fees: There’s no cost to use Form 5000A, but you’ll need a valid Arizona TPT license. To see if there’s a cost for the license, then you can check out our guide on Sales Tax Permit fees.
8. Understand Renewal Requirements: There are two options available for you when you fill out your Arizona Resale Certificate (Form 5000A).
- Single Transaction Certificate: This option is for a one-time purchase. This is ideal if you make infrequent purchases from a particular supplier.
- Blanket Certificate (for a specific period): You can set a validity period by entering “Period From [Date] Through [Date]”. While the form allows for up to 48 months, the Arizona Department of Revenue (AZDOR) generally encourages that you do not exceed a 12-month period for blanket certificates.A certificate may be accepted in “good faith” for up to 48 months if the vendor can verify that your underlying Arizona TPT license remains valid for each calendar year covered by the certificate.
The validity of any resale certificate (whether for a single transaction or a period) depends upon your Arizona Transaction Privilege Tax (TPT) license remaining active throughout that established period.
If your TPT license becomes inactive, your resale certificate will no longer be valid.
How to Use an Arizona Resale Certificate
To properly utilize your resale certificate in Arizona when making tax-exempt purchases for resale, you’ll need to present a valid copy of your Transaction Privilege Tax (TPT) Resale Certificate (Form 5000A) to your supplier at the time of purchase.
Arizona generally accepts resale certificates issued by other states.
- Good Faith Acceptance: Vendors in Arizona will typically accept an out-of-state resale certificate in good faith, provided it contains all the necessary information (buyer’s name, address, seller’s permit number from the issuing state, reason for exemption, etc.)
If you are an out-of-state business purchasing from a vendor in Arizona and plan to use your home state’s resale certificate, be prepared to provide it at the time of purchase.
However, note that Arizona vendors have the option to decline alternative resale certificates. This is to avoid being subject to a greater burden of proof when accepting forms other than the Form 5000A. With that in mind, contact your Arizona supplier ahead of time to confirm their policy on accepting out-of-state certificates.
For more information regarding sales tax exemption laws in Arizona, you may read the state’s official guidelines.
Multi-Jurisdictional Resale Certificates
A standardized multi-jurisdictional resale certificate simplifies tax-exempt purchases for businesses that operate and make purchases for resale across state lines.
Unlike a standard resale certificate issued by a single state, a multi-jurisdictional certificate seeks recognition and acceptance by multiple states as valid proof that the buyer intends to purchase the goods for resale and is therefore exempt from sales tax at the time of purchase.
However, it’s crucial to understand that not all states accept these multi-state forms, and acceptance can come with specific conditions.
There are 3 primary types of multi-jurisdictional resale certificates that a business operating in or selling to vendors in Arizona might encounter:
- Border States Uniform Sale for Resale Certificate (Form 60-0081): This form also serves as a valid resale certificate recognized by the AZDOR. The Border States Caucus created it, comprising the four border states (Arizona, California, New Mexico, and Texas).To simplify transactions between these border states, the institution developed the Form 60-0081. This form’s goal is to facilitate trade, including cross-border transactions (in the spirit of agreements like the former North American Free Trade Agreement (NAFTA), now superseded by the USMCA. However, Arizona’s tax laws and the other participating states still determine the sales tax exemption guidelines.
- Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form: This is a widely recognized form accepted by a significant number of states (though not all). Arizona accepts the form only if you include your Arizona TPT license number and properly complete it. Out-of-state purchasers can include their home state’s registration number.You can find this form on the Multistate Tax Commission (MTC) website.
- Streamlined Sales Tax (SST) Certificate of Exemption: Arizona is not a member of the Streamlined Sales Tax Governing Board. Therefore, while an Arizona vendor might accept an SST Certificate of Exemption, they are primarily looking for an Arizona Resale Certificate (Form 5000A) or the Uniform Sales & Use Tax Resale Certificate.You can find more information about the SST and its member states on the Streamlined Sales Tax Governing Board website.
Under the state’s official guidelines, Arizona is open to a variety of other resale certificate forms.
Despite this confirmation, it’s still best to verify which certificates your Arizona suppliers are willing to accept. This practice ensures seamless transactions and helps avoid audit issues.
Responsibilities When Using or Accepting an Arizona Resale Certificate
Buyer Responsibilities
If you use an Arizona resale certificate, you are responsible for ensuring you use it only for purchases of goods or services you intend to resell. Using it for personal or operational items (like office supplies or equipment) is illegal and may lead to penalties.
- Arizona-based buyers: Provide a fully completed Arizona Resale Certificate (Form 5000A) to your suppliers for qualifying purchases.
- Out-of-state buyers: If your business has a sales tax nexus within Arizona, you are generally required to register with the AZDOR. This registration grants you an Arizona Transaction Privilege Tax (TPT) license. The TPT license number is required to complete the Form 5000A.For businesses that do not have an Arizona nexus and are purchasing goods in Arizona solely for resale outside of Arizona, a vendor may accept a valid resale certificate from your home state.
Seller Responsibilities
As a seller in Arizona, accepting a resale certificate comes with the responsibility of verifying and retaining proper documentation for tax-exempt sales. You must:
- Accept the certificate in good faith
- Be mindful of the resale certificate’s validity period
- Validate the Arizona TPT license number via the AZDOR’s online verification page
- If the buyer is using their home state’s sales tax number, you must follow the respective state’s verification process
- Ensure it includes all required information: buyer’s name, address, sales tax permit number (or equivalent), reason for exemption, and signature
- Request additional necessary information (in case the buyer is using alternative certificates)
- Reject the certificate if the items aren’t for resale (e.g., personal or business use)
Keep records for at least 4 years: A properly completed resale certificate is your official proof of why sales tax wasn’t collected. You must retain it in your records for at least four years in case of a sales tax audit by the AZDOR.
Frequently Asked Questions About the Arizona Resale Certificate
Are There Penalties for Misusing an Arizona Resale Certificate?
Yes. The intentional misuse of an Arizona Resale Certificate (Form 5000A) results in criminal penalties. The Arizona authorities may charge anyone found guilty of this offense with a felony. Learn more about Arizona’s definition of criminal violations in the A.R.S. § 42-1127(B)
Does an Arizona Resale Certificate Expire?
The Arizona resale certificate (Form 5000A) is typically valid for 12 months or a one-time transaction. However, buyers have the option to choose the certificate’s validity period, which cannot exceed 48 months. Moreover, the validity also depends on the buyer’s sales tax permit or TPT license. An inactive permit or license means the resale certificate also becomes invalid.
How Do I Verify a Resale Certificate in Arizona?
To validate a Resale Certificate in Arizona, there are 3 steps:
- Request a completed Form 5000A from the buyer.
- Locate their 8-digit Arizona Transaction Privilege Tax license number on the form.
- Use the Arizona Taxes License Verification to confirm if the permit is active.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale certificates in Arizona. TaxHero simplifies the process. From keeping your Arizona Transaction Privilege Tax License active to ensuring you use resale certificates correctly.
Save time. Avoid penalties. Stay compliant.
Schedule a Demo to see how TaxHero can streamline your resale certificate in Arizona process today!