If you run an Ecommerce or CPG business in Illinois, securing a Illinois 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 Illinois sales tax laws.
Understanding Resale Certificates in Illinois
What is a Illinois Resale Certificate?
In Illinois, the Illinois Department of Revenue (IDOR) issues the Certificate of Resale that allows businesses to:
- Purchase goods without paying sales tax, as long as the buyer plans to resell the goods to their customers during regular business operations.
- 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, the Illinois resale certificate doesn’t exempt you from all sales tax obligations. Businesses must still collect and remit sales tax
Why do you need a Illinois Resale Certificate?
Obtaining a resale certificate in Illinois 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 Illinois’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 Illinois 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 that businesses comply with Illinois’s sales tax laws and regulations, thereby avoiding penalties.
In Illinois, the official resale certificate form is Form CRT-61, Certificate of Resale.
Purchasers must include their Illinois Account ID to confirm they are registered with the Illinois Department of Revenue (IDOR) and authorized to make tax-exempt purchases for resale.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
An Illinois Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. An Illinois Resale Certificate (name of form), 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 Illinois?
Businesses that purchase goods for resale can use an Illinois Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Illinois Sales Tax Permit.
How to Get a Resale Certificate in Illinois: A Step-by-Step Guide
Getting a resale certificate in Illinois 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 Illinois Department of Revenue (IDOR). Only businesses with a valid Illinois Sales Tax Permit (also called an Illinois Account ID) are eligible to use a resale certificate.
2. Get an Illinois Sales Tax Permit:
If you don’t already have one, apply for an Illinois Sales Tax Permit through the MyTax Illinois website. You must get this permit before you can issue or use a resale certificate
Need help? Read our blog: How to Get a Seller’s Permit in Illinois
3. Gather Your Business Information
You’ll need basic business details to complete the resale certificate, including:
- Business Identification Information: Legal business name, physical address, mailing address
- Business Entity Structure (i.e., sole proprietorship, partnership, Subchapter S Corp., corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Name, Address, Driver’s License, and SSN of owners, partners, or officers
- Business Activity Details: Date & State of Incorporation, start date with the state of Illinois (nexus start date), Estimated Monthly Sales in Illinois
- Names and locations of banks where you have an account
- Names and addresses of suppliers
- Name and address of bookkeeper or accountant
- Name and address of personal references
- If you have purchased an existing business, you must also provide the previous permit information
- NAICS Code
4. Complete Form CRT-61
Download and fill out the Illinois Certificate of Resale (Form CRT-61) from the IDOR website. Give this form to your suppliers when making tax-exempt purchases.
5. Submission
You don’t need to submit the form to IDOR. You must give the completed Form CRT-61 directly to your supplier at the time of purchase for resale.
6. Pay Any Applicable Fees
There’s no fee to use Form CRT-61, but you must first obtain a valid Illinois Sales Tax Permit. To see if there are any registration costs, refer to our guide on Sales Tax Permit fees.
7. Understand Renewal Requirements
Illinois resale certificates don’t expire on a fixed schedule, but sellers are advised to request updated certificates at least every three years. Your resale certificate stays valid only while your Illinois Sales Tax Permit remains active and in good standing.
How to Use a Resale Certificate in Illinois
To properly utilize your resale certificate in Illinois when making tax-exempt purchases for resale, you’ll need to present a valid copy of your Illinois Certificate of Resale (Form CRT-61) to your supplier at the time of purchase. This form shows that the goods are being purchased solely for resale in the normal course of business.
Illinois does not accept resale certificates issued by other states. Instead, specific requirements must be followed:
- Good Faith Acceptance: Illinois suppliers must collect a completed RT-61 from the buyer and may not accept resale certificates from other states, even if they appear valid or contain comparable information.
- No Reciprocity: Illinois generally does not accept resale certificates issued by other states for purchases made within Illinois. If you are an out-of-state buyer and have nexus in Illinois, you must register with the Illinois Department of Revenue and obtain a valid Illinois Sales Tax Account ID number to issue a resale certificate for your Illinois purchases. However, if you are an out-of-state business that does not have nexus in Illinois and will only resell and deliver the purchased property outside of Illinois, you may still use Illinois Form CRT-61 by providing your out-of-state registration information and certifying that item is for resale outside Illinois.
If you are an out-of-state business purchasing from a vendor in Illinois, you must complete and present Illinois Form CRT-61 and include either your Illinois account ID number or documentation showing exemption based on delivery outside Illinois. Vendors must confirm the documentation meets IDOR standards.
For more details, see 86 Ill. Adm. Code 130.1405 or visit the Illinois Department of Revenue website.
Multi-Jurisdictional Resale Certificates
A multi-jurisdictional resale certificate is a standardized form designed 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.
- Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form:Issued by the Multistate Tax Commission (MTC), this form is accepted by many states. In Illinois, it will be accepted only if it includes your valid Illinois Sales Tax Permit or Resale Number on the Illinois line of the form, is fully completed, and is submitted in good standing. It’s important to note that Illinois specifically requires its own registration or resale number, and typically does not accept other states’ numbers on this form for purchases made within the state, unless the purchase meets specific criteria for out-of-state resellers who will only deliver outside Illinois.
- Streamlined Sales Tax (SST) Certificate of Exemption: Illinois is not a member of the Streamlined Sales Tax Governing Board, and therefore does not accept the SST Certificate of Exemption for tax-exempt purchases. Vendors in Illinois will expect to see a completed Illinois Certificate of Resale (Form CRT-61) instead.
Businesses need to verify whether Illinois 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 Illinois Resale Certificate
Buyer Responsibilities
If you’re using an Illinois resale certificate, you’re responsible for ensuring 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.
- Illinois-based buyers: You must be actively registered with the Illinois Department of Revenue and provide your valid Illinois Sales Tax Permit number on the resale certificate. The certificate (typically Form CRT-61) should be completed in full, including a detailed description of the property being purchased. If you’re making recurring purchases from the same supplier, a blanket certificate may be used, but it must be updated at least once every three years.
- Out-of-state buyers: If you’re not registered in Illinois, you may still use a resale certificate when purchasing goods strictly for resale and delivery out-of-state. You must check the “out-of-state purchaser” box on CRT‑61 and provide your home state’s registration number or attach proof. Illinois does not allow this certificate for services or for resale within Illinois without proper Illinois registration.
Seller Responsibilities
As a seller in Illinois, accepting a resale certificate carries important legal responsibilities. To protect yourself from tax liability, you must:
- Accept the certificate in good faith: This means believing that the purchase is indeed for resale and not for the buyer’s personal or business use.
- Verify all required information: The resale certificate must include the buyer’s legal name and address, registration number (or statement of out-of-state resale intent), description of items, and a dated signature.
- Reject improper certificates: If the items being sold are clearly for use and not for resale, or if the form is incomplete, you must charge sales tax as usual.
- Keep records for at least three and half years: Illinois law (86 Ill. Adm. Code 130.1405) requires sellers to retain copies of resale certificates for no less than three anda half years. This documentation serves as your primary defense in the event of a sales tax audit. Blanket certificates must also be reviewed and refreshed at least once every three years.
Keep records for at least 4 years: Your properly completed resale certificate proves why you didn’t collect sales tax. If you’re audited, keep all records for the audit period until it ends, even if that means storing them for more than four years.
Frequently Asked Questions About the Illinois Resale Certificate
Are There Penalties for Misusing a Illinois Resale Certificate?
Yes. Misusing a resale certificate, such as using it for personal items or non-resale purposes, can lead to serious consequences. Penalties may include tax liability, interest, additional fines, and even criminal prosecution. Always use Form CRT-61 correctly and only for legitimate resale transactions.
Does an Illinois Resale Certificate Expire?
Technically, the CRT-61 resale certificate has no formal expiration date. However, if you’re using a blanket certificate for ongoing purchases from the same seller, Illinois requires it to be reviewed and updated at least once every three years. The certificate also becomes invalid if your Illinois Sales Tax Permit becomes inactive or revoked.
How Do I Verify a Resale Certificate in Illinois?
If you’re a seller, follow these steps to validate a buyer’s resale certificate:
- Step 1: Request a completed Form CRT-61 from the buyer.
- Step 2: Confirm the Illinois Account ID (Sales Tax Permit number) listed.
- Step 3: Use the Illinois Department of Revenue’s business verification tool to make sure the account is active and valid.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale certificates in Illinois. TaxHero simplifies the process, from keeping your Illinois Sales Tax Permit active to ensuring you use resale certificates correctly.
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Schedule a Demo to see how TaxHero can streamline your resale certificate in Illinois process today!