If you run an Ecommerce or CPG business in Georgia, securing a Georgia 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 Georgia sales tax laws.
Understanding Resale Certificates in Georgia
What is a Georgia Resale Certificate?
In Georgia, a Sales Tax Certificate of Exemption is a document issued by the Georgia Department of Revenue 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 once at the wholesale level and again at the point of retail sale.
However, a Georgia 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 a Resale Certificate in Georgia?
Obtaining a resale certificate in Georgia 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 that you can purchase inventory and materials for resale without paying Georgia’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 Georgia 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 Georgia’s sales tax laws and regulations to avoid penalties.
In Georgia, the specific form required for a resale certificate is the Georgia Sales Tax Certificate of Exemption (Form ST-5).
When filling out Form ST-5, the purchaser must include their Georgia taxpayer number to show they’re registered with the Georgia Department of Revenue and authorized to make tax-exempt purchases for resale.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A Georgia Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. A Georgia Resale Certificate (Form ST-5), on the other hand, allows you to purchase goods tax-free from suppliers if those goods are intended for resale. To use a resale certificate, you must have an active sales tax permit.
Who Can Use a Resale Certificate in Georgia?
Businesses that purchase goods for resale can use a Georgia Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Georgia Sales Tax Permit.
How to Get a Resale Certificate in Georgia: A Step-by-Step Guide
Getting a resale certificate in Georgia 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 Georgia Department of Revenue. Only businesses with a valid Georgia Sales Tax Permit can use a resale certificate.
2. Get a Georgia Sales Tax Permit: If you don’t already have one, apply for a Georgia Sales Tax Permit through the Georgia Department of Revenue website. This permit is required before you can issue or use a resale certificate.
Need help? Read our blog: How to Get a Seller’s Permit in Georgia
3. 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 Georgia sales tax permit number (if already obtained)
- Your business type (e.g., sole proprietorship, LLC, corporation).
4. Complete Form ST-5: Download and fill out the Georgia Sales and Use Tax Resale Certificate (Form ST-5) from the Georgia Department of Revenue website. You’ll present this form to your suppliers when making tax-exempt purchases.
5. Submission: No submission required in Georgia. You don’t submit the resale certificate to the state. Instead, give the completed form directly to your suppliers when buying items for resale.
6. Pay Any Applicable Fees: There’s no cost to use Form ST-5, but you’ll need a valid Georgia Sales Tax Permit. To see if there’s a cost for the permit, check out our guide on Sales Tax Permit fees.
7. Understand Renewal Requirements: Your Georgia resale certificate remains valid only while your Sales Tax Permit is active. To maintain your ability to make tax-exempt purchases for resale, you must renew your Georgia Sales Tax Permit as the state requires.
How to Use a Resale Certificate in Georgia
To properly utilize your resale certificate in Georgia when making tax-exempt purchases for resale, you’ll need to present a valid copy of your Georgia Sales Tax Certificate of Exemption to your supplier at the time of purchase.
Georgia generally does accept resale certificates issued by other states. However, there might be specific conditions:
- Reciprocity laws must exist between Georgia and the buyer’s state. If there is no reciprocity, Georgia suppliers cannot accept the out-of-state resale certificate.
- Ensure the resale certificate is valid & fully completed with accurate buyer information.
Multi-Jurisdictional Resale Certificates
A multi-jurisdictional resale certificate is a standardized form to simplify 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 aims to be recognized and accepted by multiple states as valid proof that the goods being purchased are intended for resale and are 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 two primary types of multi-jurisdictional resale certificates that a business operating in or selling to vendors in Georgia might encounter:
- Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form: This is a widely recognized form accepted by a significant number of states (though not all). Georgia may accept the form, but only if you include your Georgia Sales Tax Permit number and complete it properly. Out-of-state purchasers should 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: Georgia is a full member of the Streamlined Sales Tax Governing Board as of October 1, 2005. As such, it accepts the SST Certificate of Exemption for qualifying resale purchases. Businesses using either certificate must ensure they meet all Georgia-specific requirements. Improper use or incomplete documentation can result in tax liability upon audit.
Businesses need to verify whether Georgia accepts these multi-jurisdictional certificates and if there are any specific requirements or limitations on their use within the state. This is to avoid any audit issues.
Responsibilities When Using or Accepting a Resale Certificate in Georgia
Buyer Responsibilities
When using a Georgia resale certificate, you must ensure it’s used 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.
- Georgia-based buyers: Provide a fully completed Form ST-5 to your suppliers for qualifying purchases.
- Out-of-state buyers:
- You may use a resale certificate to buy goods for resale from Georgia suppliers, but acceptance depends on reciprocity between your home state and Georgia.
- If no reciprocal agreement exists, Georgia suppliers cannot accept your out-of-state certificate.
- Ensure your certificate is complete, valid, and not expired. Since the burden of proof is on the seller, they may verify its legitimacy using state-provided tools like the Georgia Sales Tax Verification Tool.
Seller Responsibilities
As a seller in Georgia, 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
- Ensure it includes all required information: buyer’s name, address, sales tax permit number (or equivalent), reason for exemption, and signature.
- Reject the certificate if the items aren’t for resale (e.g., personal or business use)
Keep records for at least 3 years: A properly completed resale certificate serves as your official proof of why you didn’t collect sales tax. You must retain it in your records for at least three years in case of a sales tax audit by the Georgia Department of Revenue.
Frequently Asked Questions About the Georgia Resale Certificate
Are There Penalties for Misusing a Resale Certificate in this State?
Yes. Misusing a resale certificate for business or personal consumption can lead to serious consequences, including audits, financial penalties (such as unpaid taxes, fines, and interest), and potential legal action or loss of business licenses.
It’s imperative to use resale certificates strictly for purchasing items intended for resale to end consumers.
Does a Georgia Resale Certificate Expire?
The resale certificate (Form ST-5) has no expiration date. However, it is only valid while your Georgia Sales Tax Permit remains active. If your permit is revoked or inactive, your resale certificate becomes invalid.
How Do I Verify a Resale Certificate in Georgia?
If you’re a seller in Georgia, here’s how to validate a buyer’s resale certificate:
- Visit the Georgia Tax Center.
- On the Home page, under Searches, click on Sales Tax IDs
- Read the instructions and tips carefully. Click Next.
- Enter the sales tax number(s) for verification. Alternatively, you can complete and import an Excel template. Click Next.
- Print a copy of the search results for your records.
Do note that this tool only verifies Georgia Sales Tax Numbers. It does not verify state tax identification numbers, federal employer identification numbers, out-of-state sales tax numbers, or social security numbers.
How TaxHero Can Help
Managing sales tax compliance and resale certificates in Georgia doesn’t have to be complicated. TaxHero simplifies the process, from keeping your Georgia Sales Tax Permit active to ensuring you use resale certificates correctly.
Save time. Avoid penalties. Stay compliant.
Schedule a Demo to see how TaxHero can streamline your Georgia resale certificate process today!