How to Get a Maryland Resale Certificate for your Business

If you run an Ecommerce or CPG business in Maryland, securing a Maryland 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 Maryland sales tax laws.

Understanding Resale Certificates in Maryland

What is a Maryland Resale Certificate?

In Maryland, a Resale Certificate is a document that a business registered for sales and use tax provides to its vendors 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, a Maryland 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 Maryland Resale Certificate?

Obtaining a resale certificate in Maryland 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 Maryland’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 Maryland 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 Maryland’s sales tax laws and regulations to avoid penalties.

Maryland does not issue a specific state form for resale certificates. Instead, businesses typically use the suggested “Blanket Resale Certificate” provided by the Comptroller of Maryland or the Multistate Tax Commission’s Uniform Sales & Use Tax Resale Certificate.

However, under Maryland’s Tax-General Code §11–408 and COMAR 03.06.01.14, the state requires any resale certificate to be properly completed. Thus, it must contain the following details:

• Name, address, contact information, and signature of the purchaser.
• A clear statement declaring that the purchase is intended for resale.
• A valid Maryland sales and use tax registration number.

For reference, you can check Maryland’s sample resale certificate and use it as a guide.

Resale Certificate vs. Sales Tax Permit: What’s the Difference?

In Maryland, the state generally refers to a Sales Tax Permit as a Sales and Use Tax License. It authorizes your business to collect and remit sales tax on taxable sales to customers.

Meanwhile, a Maryland Resale Certificate lets you purchase goods tax-free from suppliers if you intend to resell those goods. To use a resale certificate, you’re required to have an active Maryland Sales and Use Tax License.

Who Can Use a Resale Certificate in Maryland?

Businesses that purchase goods for resale can use a Maryland Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Maryland Sales and Use Tax License.

However, there are 2 unique circumstances where unregistered businesses can use a resale certificate in Maryland.

According to Maryland’s Tax-General Code §11–408 and COMAR 03.06.01.14, those specific exceptions are:

1. Antique and used collectible purchases: Unregistered out-of-state buyers are allowed to use a resale certificate in Maryland when purchasing antiques or used collectibles. To complete the form, you must provide your home state’s sales and use tax registration number. You’re also required to give a copy of your home state’s sales tax permit or license to Maryland vendors.
2. Buyers from states without sales tax: Provide a copy of your trader’s license from your home state or any equivalent document.

It’s important to note that Maryland does not allow unregistered in-state businesses to use resale certificates for transactions within the state. Only qualified buyers receive these specific exemptions.

How to Get a Resale Certificate in Maryland: A Step-by-Step Guide

Getting a resale certificate in Maryland 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 Comptroller of Maryland. Only businesses with a valid Maryland Sales and Use Tax License can generally use a resale certificate for in-state purchases.

Having an account with the MD Comptroller also grants you full access to the Maryland Tax Portal. This gives you the option to access and download Maryland’s Suggested Blanket Resale Certificate through the online webpage.

2. Get a Maryland Sales and Use Tax License: If you don’t already have one, apply for a Maryland Sales and Use Tax License through the Maryland Tax Connect website. You must obtain this certificate before you can issue or use a resale certificate.

Maryland is among the few states that primarily require a Maryland Sales and Use Tax License for in-state businesses making purchases for resale. Although it does accept out-of-state sales tax ID numbers in specific, limited circumstances.

Therefore, obtaining a Maryland Sales and Use Tax License is mandatory if your business has a Maryland sales tax nexus and wishes to make routine tax-exempt purchases for resale within the state.

Need help? Read our blog: How to Get a Seller’s Permit in Maryland

3. Understand Out-of-State Buyer Options (Temporary Purchases): Out-of-state businesses can provide an alternative resale certificate. Particularly, a completed Multistate Tax Commission (MTC) Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form may be used. However, you still need to obtain a Maryland sales and use tax license number.

The purchased goods must be intended for resale outside of Maryland. Otherwise, Maryland vendors may decline your resale certificate.

Learn more about these specific provisions for out-of-state buyers and how to utilize them via the MD Comptroller.

4. Gather Your Business Information: Maryland doesn’t have a specific state-mandated resale certificate form. However, you must properly complete a valid resale certificate with essential business details, including:

• Your business’s legal name and any trade names.
• Your business address and contact information.
• Your signature, along with a clear resale statement (declare that the goods purchased are intended for resale).
• Your Federal Employer Identification Number (FEIN) or Social Security Number (SSN) if you’re a sole proprietor.
• Your Maryland sales and use tax license number (if already obtained).
• Your business type (e.g., sole proprietorship, LLC, corporation).

5. Complete Your Maryland Resale Certificate: Since Maryland does not have a designated state-issued resale certificate form to use, you may try the options below.

• Create your own resale certificate: It must align with Maryland’s standard requirements for a completed, valid resale certificate.
• Download Maryland’s official Suggested Blanket Resale Certificate: Ensure you fill it out accordingly. You can also use it as a reference if you prefer to create your own form.
• Access Maryland’s suggested resale certificate template: You may do this through your MD Tax Connect webpage account, if available. An account may be required to utilize this option.
• Use alternative resale certificates: Such as the Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form.

6. Submission: No submission required in Maryland. 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 a Maryland Resale Certificate, but you’ll need a valid Maryland Sales and Use Tax License. In Maryland, registering for a Sales and Use Tax License is free.

8. Understand Renewal Requirements: Maryland Resale Certificates remain valid until revoked by the MD Comptroller. Similarly, if your MD Sales and Use Tax License becomes inactive, you can no longer use resale certificates in Maryland.

MD Sales and Use Tax Licenses do not expire, but the state’s authorities can revoke them for non-compliance with tax laws.

Regardless, you must still provide an updated resale certificate form to your suppliers if there are significant changes to your business details. This ensures your suppliers have current and accurate documentation for their records, helping prevent potential audit risks.

How to Use a Maryland Resale Certificate

To properly utilize your resale certificate in Maryland when making tax-exempt purchases for resale, you’ll need to present a valid copy of your Maryland Resale Certificate to your supplier at the time of purchase.

Understanding Out-of-State Resale Certificates in Maryland: Maryland generally requires businesses with nexus in the state to hold a Maryland Sales and Use Tax License to make tax-exempt purchases for resale.

However, Maryland does accept resale certificates from out-of-state buyers under specific, limited circumstances (as explained in the “Who Can Use a Resale Certificate in Maryland” section of this blog.)

Vendors should accept the following, depending on these specific scenarios:

• A valid Multistate Tax Commission (MTC) Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form: For qualifying out-of-state transactions, this form allows buyers to provide their home state’s sales and use tax registration number or equivalent documentation, as permitted by Maryland law.
• For purchases of antiques or used collectibles: An out-of-state buyer’s home state sales and use tax registration number, along with a copy of their home state’s sales tax permit or license.
• For buyers from states without a sales tax: Buyers from states without a sales tax must provide a copy of their trader’s license or an equivalent document from their home state.

Only resale certificates that contain the required information, which may include a valid Maryland Sales and Use Tax license number (for in-state businesses) or acceptable out-of-state credentials (for specific exempt scenarios), properly complete Maryland’s standards.

For Cases Where Sales Tax Was Erroneously Paid

Businesses charged with Maryland sales tax on purchases that should have been tax-exempt for resale can apply for a refund. This only applies to specific cases allowed by the Maryland Comptroller, such as:

• The vendor declined your completed resale certificate.
• Your business should have registered in Maryland for sales and use tax (i.e., had nexus and an obligation to collect tax), but did not, and consequently paid tax on goods for resale.
• You are registered to collect sales tax in your home state, but the vendor has declined to accept your permit number on your resale certificate.

If you experienced any of these scenarios, you may apply for a refund with the MD Comptroller. To request a refund, you would generally file the Form ST-212, Application for Refund of Maryland Sales and Use Tax.

In summary, understanding Maryland’s specific requirements for both in-state and qualifying out-of-state transactions is crucial.

This ensures compliance and allows you to consistently use resale certificates in Maryland for qualifying tax-exempt purchases. For most in-state businesses, holding an active Maryland Sales and Use Tax License is the primary pathway to using resale certificates.

For more information regarding resale certificate regulations in Maryland, read the state’s official guidance on Sales and Use Tax. Refer to the sections on Purchases for Resale available on the Comptroller of Maryland’s website.

Multi-Jurisdictional Resale Certificates

A standardized form designed to simplify tax-exempt purchases for businesses that operate and make purchases for resale across state lines is a multi-jurisdictional resale certificate.

Unlike a standard resale certificate issued by a single state, a multi-jurisdictional certificate aims for multiple states to recognize and accept it as valid proof. A buyer using these forms declares that they intend to purchase the goods 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. 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 Maryland might encounter.

1. Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form

A significant number of states widely recognize this form (though not all). Maryland accepts this form, but its validity depends on the buyer meeting Maryland’s specific requirements.

This generally involves providing a valid Maryland Sales and Use Tax License number for businesses with a sales tax nexus in Maryland. Maryland law permits the use of other specific credentials for qualifying out-of-state transactions. For instance, religious organizations may complete this form using their 8-digit exemption numbers.

Out-of-state sales tax permits (or the equivalent) may be honored through this form. However, the buyer must meet one of Maryland’s specific statutory exceptions, such as:

• Purchasing antique goods or collectibles in Maryland
• You’re a buyer from a state without sales tax

You can only use this multijurisdictional form for resale transactions, and it does not qualify as a general exemption certificate.

Sellers must verify the sales tax registration number on this form (whether Maryland or the accepted out-of-state ID, where applicable) via the MD Tax Connect portal or through other due diligence as permitted.

You can find this form on the Multistate Tax Commission (MTC) website.

2. Streamlined Sales Tax (SST) Certificate of Exemption

Maryland is not a member of the Streamlined Sales Tax Governing Board. Therefore, Maryland vendors generally do NOT accept an SST Certificate of Exemption for resale purposes. The SST Certificate is only valid in states that are members of the Streamlined Sales Tax Project.

Primarily, Maryland vendors are more likely to accept the Maryland-specific suggested resale certificate form or the Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form (MTC Form), provided it is completed according to Maryland’s specific requirements.

You can find more information about the SST and its member states on the Streamlined Sales Tax Governing Board website.

For a seamless transaction, it’s best to inquire about your Maryland supplier’s policies on accepting various types of resale certificates beforehand. This practice also helps prevent potential audit issues.

Responsibilities When Using or Accepting a Maryland Resale Certificate

Buyer Responsibilities

If you’re using a Maryland resale certificate, you must ensure 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.

• Maryland-based buyers: Provide a fully completed Maryland Resale Certificate to your suppliers for qualifying purchases.
• Out-of-state buyers: If your business has a sales tax nexus within Maryland, you are generally required to register with the MD Comptroller and obtain a Maryland Sales and Use Tax License. This grants you a Maryland sales and use tax registration number, which is required to complete a Maryland resale certificate for routine in-state purchases for resale.
  For businesses that do not have a Maryland nexus and are purchasing goods in Maryland solely for resale outside of Marylandyou may utilize the Multistate Tax Commission (MTC) Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form, or provide your home state’s sales tax registration number or equivalent documentation if you meet Maryland’s specific statutory exceptions (e.g., for antiques/collectibles or buyers from states without sales tax).

Seller Responsibilities

As a seller in Maryland, 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, Maryland sales tax registration number. Maryland law may accept other acceptable out-of-state credentials for certain buyers. You must include the reason for the exemption and signature as well.
• Reject the certificate if the items aren’t for resale (e.g., personal or business use) or if you know or should know the property is not for resale.
• Decline the resale certificate if the seller does not deliver the purchased goods to the buyer’s address or if the goods are under $200. This also applies if the payment is by cash, check, credit card, debit card, or electronic transfer of funds.

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 Maryland Comptroller. Keeping accurate records is critical to avoid holding yourself liable for uncollected sales tax, plus penalties and interest.

If you have regular customers making frequent purchases for resale, you may keep a valid blanket resale certificate on file. You should update these blanket certificates periodically, generally no less frequently than every three years, or if there are significant changes to the buyer’s information.

Transactions under $200

Buyers cannot use a resale certificate for goods worth less than $200 if the payment is by cash, check, credit card, debit card, or electronic transfer of funds. This rule applies unless the seller delivers the goods directly to the buyer’s retail place of business.

You can only use a resale certificate in Maryland for goods under $200 if:

• The amount is initially purchased on credit by the seller (e.g., invoiced)
• The goods are otherwise qualified for tax exemption even if not intended for resale (e.g., certain medicines or food items)
• The authorities approve or regulate the purchased alcoholic beverages in Maryland.

Frequently Asked Questions About the Maryland Resale Certificate

Are There Penalties for Misusing a Maryland Resale Certificate?

Yes. Intentionally misusing a Maryland resale certificate results in various penalties subject to Maryland’s code § 13-1006. Anyone registered with the MD Comptroller but willfully fails to collect or remit tax is guilty of a misdemeanor. This offense results in imprisonment not exceeding 5 years or a fine not exceeding $10,000.

Learn more about Maryland sales tax penalties via the MD Comptroller.

Does a Maryland Certificate Expire?

Maryland resale certificates have no expiration date. However, the certificate is only valid while your Maryland Sales and Use Tax License remains active. If you revoke your license or it becomes inactive, you invalidate your resale certificate.

How Do I Verify a Resale Certificate in Maryland?

If you’re a seller in Maryland, here’s how to validate a buyer’s resale certificate:

1. Request a completed resale certificate from the buyer.
2. Locate their 8-digit Maryland Central Registration number on the form (for Maryland-based businesses) or the acceptable out-of-state identification (for qualifying out-of-state buyers).
3. Use Maryland’s “Verify Sales and Use Tax Registration or Exemption” feature. Enter the ID type and the required number to verify the Maryland Central Registration Number’s validity.
   Note: This tool primarily verifies Maryland-issued registration numbers and specific Maryland exemption certificates.
   For out-of-state resale certificates accepted under Maryland’s specific exceptions, sellers must ensure the form is properly completed. Real-time verification of out-of-state sales tax numbers via this portal is typically not available.

How TaxHero Can Help

You don’t have to complicate managing sales tax compliance and resale certificates in Maryland. TaxHero simplifies the process. From keeping your Maryland Sales Tax and Use Tax License 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 Maryland process today!