If you run an Ecommerce or CPG business in Michigan, securing a Michigan 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 Michigan sales tax laws.
Understanding Resale Certificates in Michigan
What is a Michigan Resale Certificate?
In Michigan, a Sales and Use Tax Certificate of Exemption is a document issued by the Michigan Department of Treasury 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 Michigan resale certificate is not a blanket exemption from all sales tax obligations. Businesses are required to collect and remit sales tax on taxable sales to end consumers.
Why do you need a Resale Certificate in Michigan?
Obtaining a resale certificate in Michigan 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 Michigan’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 Michigan 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 Michigan’s sales tax laws and regulations to avoid penalties.
In Michigan, the specific form required for a resale certificate is the Michigan Sales and Use Tax Certificate of Exemption (Form 3372).
The Department does not issue tax exemption numbers. Sellers are not required to obtain a state-issued tax exemption number as evidence to verify if a buyer is eligible for a sales and use tax exemption.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A Michigan Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. A Michigan Resale Certificate (Form 3372), 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 Michigan?
Businesses that purchase goods for resale can use a Michigan Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Michigan Sales Tax Permit.
How to Get a Resale Certificate in Michigan: A Step-by-Step Guide
Getting a resale certificate in Michigan 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 Michigan Department of Treasury. Only businesses with a valid Michigan Sales Tax Permit can use a resale certificate.
2. Get a Michigan Sales Tax Permit: If you don’t already have one, apply for a Michigan Sales Tax Permit through the Michigan Department of Treasury 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 Michigan
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 Michigan sales tax permit number (if already obtained)
- Your business type (e.g., sole proprietorship, LLC, corporation).
4. Complete Form 3372: Download and fill out the Michigan Sales and Use Tax Resale Certificate (Form 3372) from the Michigan Department of Treasury website. You’ll present this form to your suppliers when making tax-exempt purchases.
5. Submission: No submission required in Michigan. 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 3372, but you’ll need a valid Michigan 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: A blanket resale certificate in Michigan remains valid for up to four years. Although it may expire sooner if a business does not make at least one purchase every 12 months for resale purposes.
How to Use a Resale Certificate in Michigan
To properly utilize your resale certificate in Michigan when making tax-exempt purchases for resale, you’ll need to present a valid copy of your Sales and Use Tax Certificate of Exemption to your supplier at the time of purchase.
Michigan generally does accept resale certificates issued by other states. However, there might be specific conditions:
- Good Faith Acceptance: Vendors in Michigan 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.)
- Reciprocity: The acceptance might be based on reciprocal agreements with the state that issued the certificate.
If you are an out-of-state business purchasing from a vendor in Michigan and plan to use your home state’s resale certificate, be prepared to provide it 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 Michigan, you may visit the state’s website.
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 Michigan 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). In Michigan, blanket certificates utilizing the MTC form are effective for four years, unless a shorter duration is explicitly specified. This aligns with the broader seller liability rules detailed in Revenue Administrative Bulletin 2022-19. You can find this form on the Multistate Tax Commission (MTC) website.
- Streamlined Sales Tax (SST) Certificate of Exemption: Michigan 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 Nevada-specific requirements. Improper use or incomplete documentation can result in tax liability upon audit.
Businesses need to verify whether Michigan 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 Michigan
Buyer Responsibilities
If you’re using a Michigan 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.
- Michigan-based buyers:
- Must obtain a free Michigan Sales Tax License through the Michigan Treasury Online (MTO) portal
- Must fully complete Form 3372 (including all required sections) and provide it to the seller
- The certificate must be used strictly for qualified resale purchases only.
- To maintain a valid exemption, you must promptly update the certificate if business information changes.
- Out-of-state buyers:
- Michigan generally accepts out-of-state resale certificates, including the Uniform Sales and Use Tax Certificate (Multistate Tax Commission – MTC) and the Streamlined Sales and Use Tax Agreement Certificate of Exemption.
- You must have a valid sales tax permit from your home state and ensure the certificate is filled out correctly.
- Check the vendor’s policy beforehand, as some may decline out-of-state certificates if they’re incomplete or unclear.
Seller Responsibilities
As a seller in Michigan, 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)
When making exempt sales, sellers should always consult the relevant exemption statute to check for additional requirements. For example, in resale claims, sellers must collect the purchaser’s sales tax license number if they have one.
These steps ensure that exempt transactions are properly documented and legally compliant.
Recordkeeping Requirements: A properly completed Michigan Certificate of Exemption serves as your proof for not collecting sales tax on an exempt sale. Sellers must retain resale certificates and accurate transaction records, including those for online sales, for at least four years. If records aren’t maintained, the Department may issue tax assessments, presumed correct unless the seller proves otherwise.
Frequently Asked Questions About the Michigan Resale Certificate
Are There Penalties for Misusing a Resale Certificate in this State?
Yes. Misusing a Michigan resale certificate for personal or business purposes is unlawful and may result in the assessment of tax, statutory penalties, and interest.
By signing Form 3372, the purchaser declares under penalty of perjury that they have consulted the applicable statutes and exercised reasonable care to ensure the exemption claim is valid under Michigan law. If the claim is later disallowed, the purchaser accepts full responsibility for any tax due, penalties, and interest, including reimbursement to the vendor if necessary.
Always use Form 3372 correctly and only for qualified resale purchases to avoid issues.
Does a Michigan Resale Certificate Expire?
Michigan’s blanket resale certificates (Form 3372) allow buyers to make multiple tax-exempt purchases from the same seller over time. Their validity depends on how the certificate is established:
- If there’s a recurring business relationship, defined as at least one purchase within every 12 months, the certificate stays valid indefinitely without needing renewal.
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If you don’t expect recurring activity (i.e., more than 12 months between purchases), you can still use a blanket resale certificate. However, it must include a specified expiration date with a maximum validity of four years.
This structured setup offers flexibility while clearly outlining how long the exemption remains valid for both parties.
How Do I Verify a Resale Certificate in Michigan?
If you’re a seller in Michigan, here’s how to validate a buyer’s resale certificate:
- Request a completed Form 3372 from the buyer.
- Call the Michigan Department of Treasury to verify the validity of your buyer’s resale certificate.
How TaxHero Can Help
Managing sales tax compliance and resale certificates in Michigan doesn’t have to be complicated. TaxHero simplifies the process—from keeping your Michigan 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 Michigan resale certificate process today!