If you run an Ecommerce or CPG business in Maine, securing a Maine Resale Certificate is a smart move to protect your margins and streamline operations.
This certificate enables you to acquire tangible personal property, including inventory and components or raw materials that become a part of a new product tax-free, thereby reducing upfront costs, maintaining competitive pricing, and ensuring compliance with Maine sales tax laws. To qualify, businesses typically need to register for a sales tax account and meet specific gross sales thresholds.
Understanding Resale Certificates in Maine
What is a Maine Resale Certificate?
In Maine, a resale certificate is a document issued by the Maine Revenue Services that allows businesses to:
- Purchase goods without paying sales tax, provided the buyer plans to resell the goods 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 resale certificate helps avoid double taxation, once at wholesale and again at the point of retail sale.
However, a Maine 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 Maine Resale Certificate?
Obtaining a valid Maine Sales Tax Permit (used in place of a resale certificate) gives your business several important advantages when reselling goods:
Here are some key benefits:
- Avoid Paying Sales Tax on Inventory: You can purchase inventory tax-free, so long as the goods are for resale and your tax permit is active and valid.
- Maintain Competitive Pricing: By not paying sales tax upfront on goods you resell, you reduce your cost of goods sold, giving you pricing flexibility in competitive markets.
- Legal Compliance: Using your sales tax permit number for resale purchases ensures you’re following state rules, avoiding misclassification or penalty risks.
In Maine, there is no separate application form to request a resale certificate. Instead, the certificate is automatically issued by MRS to active retailers who report $3,000 or more in gross sales annually (new businesses may receive a provisional certificate based on anticipated sales). The resale certificate displays the business name, location, and sales tax registration number.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A Maine Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. A Maine Resale Certificate 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 Maine?
Businesses that purchase goods for resale can use a Maine Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Maine Sales Tax Permit.
Maine generally issues resale certificates automatically to registered retailers reporting $3,000 or more in annual gross sales. Businesses must use the certificate strictly for resale purchases; using it for personal or business use items is considered misuse and may result in penalties.
How to Get a Resale Certificate in Maine: A Step-by-Step Guide
Getting a resale certificate in Maine 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
You must be a registered retailer with Maine Revenue Services (MRS) and have reported at least $3,000 in gross sales in the past 12 months to qualify. New businesses may receive a provisional certificate based on anticipated sales, which becomes a full certificate once the sales threshold is met.
2. Get a Maine Sales Tax Permit
If you don’t already have one, apply through the Maine Revenue Services website using the MRS Sales and Use, Withholding, and Service Provider Tax Registration Service. You must have this permit before you can use a resale certificate.
Need help? Read our blog: How to Get a Seller’s Permit in Maine
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, and SSN of Owners, Partners, or Officers
- Business Activity Details: Date & State of Incorporation, Start Date with the State of Maine (Nexus Start Date), Estimated Monthly Sales Tax Liability, and Estimated Monthly Taxable Sales in Maine
- NAICS Code
4. Receive and Utilize Your Resale Certificate:
Once your sales tax registration is complete and you meet the sales threshold, Maine Revenue Services will automatically issue your Maine Resale Certificate. This is the document you will use. When making tax-exempt purchases, present this certificate (or a copy) to your supplier. If you need to create your certificate for a transaction (e.g., if you don’t have your official one immediately available), ensure it includes all the information required by Maine Rule 301, Section .05.
5. Submission
You don’t submit resale certificates to the state. Instead, give the completed certificate directly to your vendors when purchasing inventory or goods for resale.
6. Pay Any Applicable Fees
There’s no cost to use the Maine Resale Certificate of Exemption, but you’ll need a valid Maine Sales Tax Permit.
7. Understand Renewal Requirements
The resale certificate remains valid as long as your Maine Sales Tax Permit is active. If your permit becomes inactive or is revoked, your resale certificate is no longer valid for making tax-exempt purchases.
How to Use a Resale Certificate in Maine
To properly utilize your resale certificate in Maine when making tax-exempt purchases for resale, you’ll need to present a valid copy of your Maine Sales and Use Tax Resale Certificate to your supplier at the time of purchase.
Maine generally does not accept resale certificates issued specifically by other states. However, Maine vendors are instructed to accept the Multistate Tax Commission (MTC) Uniform Sales & Use Tax Certificate – Multijurisdictional from out-of-state purchasers.
- Good Faith Acceptance: Vendors in Maine will typically accept the MTC Uniform 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.)
- Reciprocity: Maine’s acceptance for out-of-state resale is primarily through the MTC Uniform Certificate, rather than bilateral reciprocity for individual state-issued forms.
If you are an out-of-state business purchasing from a vendor in Maine and plan to use your out-of-state exemption for resale, be prepared to provide the Multistate Tax Commission (MTC) Uniform Sales & Use Tax Certificate – Multijurisdictional at the time of purchase. It’s always a good idea to confirm the vendor’s policy on accepting out-of-state certificates beforehand.
For more information regarding sales tax exemption laws in Maine, you may visit the state’s 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: This widely accepted form is available through the Multistate Tax Commission (MTC).
- For Maine-based purchasers: If a Maine business chooses to use this form, it must include its active Maine Sales Tax Permit number and be properly completed. However, a Maine-issued Resale Certificate is generally preferred for in-state purchases.
- For out-of-state purchasers making purchases in Maine: Maine vendors are instructed to accept this MTC certificate. Out-of-state purchasers using this form should provide their home state’s permit number.
- Streamlined Sales Tax (SST) Certificate of Exemption: Maine is not a member of the Streamlined Sales Tax Governing Board. Therefore, while a Maine vendor might accept an SST Certificate of Exemption, they are primarily looking for a Maine Resale Certificate Exemption Form or the Uniform Sales & Use Tax Resale Certificate.
Businesses need to verify whether Maine 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 Maine Resale Certificate
Buyer Responsibilities
If you’re using a Maine 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.
- Maine-based buyers: You must have a valid Maine Sales Tax Permit and use the resale certificate only for transactions directly related to your resale business. Misuse such as using the certificate for purchases that support business operations rather than resale can result in fines or revocation of your permit.
- Out-of-state buyers: If you’re located outside Maine but making purchases from a Maine vendor for resale, you may present a properly completed multi-jurisdictional resale certificate (such as the MTC form). However, the vendor may require additional proof, such as a valid sales tax ID from your home state. Always verify with the seller in advance if they accept out-of-state documentation.
Seller Responsibilities
As a seller in Maine, 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: Only if you believe the buyer legitimately intends to resell the goods.
- Ensure the certificate includes all required information: This includes the buyer’s name, address, sales tax permit number, reason for exemption, and signature.
- Reject certificates for non-qualifying purchases: If the goods are not for resale, such as for internal use, you must charge sales tax.
- Keep records for at least 6 years: Maine requires sellers to retain resale certificates for six years to support tax-exempt sales in audits.
Frequently Asked Questions About the Maine Resale Certificate
Are There Penalties for Misusing a Maine Resale Certificate?
Yes. Fraudulent use for personal or non-resale purchases can lead to legal consequences, up to misdemeanor charges, revocation of the certificate, and associated penalties. Sellers must accept certificates in good faith; misuse undermines that protection.
Does a Maine Resale Certificate Expire?
Yes. Certificates are issued for specific periods, depending on the date of issuance and sales volume. New registrants projecting ≥ $3,000 in annual sales get a provisional certificate lasting approximately 3 to 4 years; thereafter, qualifying retailers receive a 4-year certificate.
How Do I Verify a Resale Certificate in Maine?
Retailers and sellers can confirm certificate validity by using the MRS Sales & Service Provider Tax Lookup Program:
- Visit the Lookup Program on the Maine Revenue Services website.
- Enter the purchaser’s registration/account ID.
- Verify that the resale certificate (or retailer certificate) is still active.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale certificates in Maine. TaxHero simplifies the process, from keeping your Maine 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 Maine process today!