If you run an Ecommerce or CPG business in Mississippi, securing a Mississippi resale certificate, in this case, your Sales Tax Permit, is a smart move to protect your margins and streamline operations.
While Mississippi doesn’t issue a separate resale certificate, your active Sales Tax Permit allows you to make tax-free purchases of inventory and raw materials intended for resale. This helps lower upfront costs, keeps your pricing competitive, and ensures compliance with Mississippi’s sales tax laws.
Understanding Resale Certificates in Mississippi
What is a Mississippi Resale Certificate?
In Mississippi, there is no separate resale certificate form. Instead, the Mississippi Sales Tax Permit, issued by the Mississippi Department of Revenue (DOR), functions as your resale certificate. It 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 Mississippi 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 Mississippi Resale Certificate?
Obtaining a valid Mississippi 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.
Mississippi does not issue a specific resale certificate form. Instead, resellers must present their sales tax permit number issued by the Mississippi Department of Revenue at the time of purchase to claim the exemption.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
Since there is no separate resale certificate form in Mississippi, the Mississippi Sales Tax Permit serves both purposes:
- A Mississippi Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers within the state.
- That same permit also functions as your resale certificate, allowing you to purchase goods tax-free from suppliers if those goods are intended exclusively for resale.
To claim resale exemptions in Mississippi, you must have an active and valid sales tax permit and present the permit number to your supplier at the time of purchase.
Who Can Use a Resale Certificate in Mississippi?
In Mississippi, any business with a valid Sales Tax Permit can claim a resale exemption. The business must be actively registered with the Mississippi Department of Revenue and intend to resell the goods being purchased.
How to Get a Resale Certificate in Mississippi: A Step-by-Step Guide
Your Mississippi Sales Tax Permit serves the same purpose as a resale certificate. Here’s how to get it:
1. Make Sure You’re Eligible
Your business must sell taxable goods or services and be registered with the Mississippi Department of Revenue. Only businesses with a valid Mississippi Sales Tax Permit can use a resale certificate (i.e., their tax permit) to make exempt purchases.
2. Get a Mississippi Sales Tax Permit
If you don’t already have one, apply for a Mississippi Sales Tax Permit through the Mississippi Department of Revenue’s Taxpayer Access Point (TAP) portal. This permit is required before you can make tax-exempt purchases for resale.
Need help? Read our blog: How to Get a Seller’s Permit in Mississippi
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
- Copy of your IRS Notice Letter CP 575/EIN Confirmation Letter
- NAICS Code
4. Completion
When making a purchase, simply present your valid sales tax permit or provide your permit number to your supplier.
5. Submission
There’s no need to submit anything to the state. Give your sales tax permit number directly to your supplier when making a tax-exempt purchase for resale.
6. Pay Any Applicable Fees
The Mississippi Sales Tax Permit is issued free of charge. There are no state-level fees associated with obtaining this permit.
7. Understand Renewal Requirements
Your resale privileges remain active as long as your Sales Tax Permit is valid. Your resale privileges remain active as long as your Sales Tax Permit is valid. While Mississippi sales tax permits typically do not require periodic renewal, it’s important to update your permit with the Mississippi Department of Revenue if there are any changes to your business, such as an address, ownership, or legal structure, to maintain compliance and continue making tax-exempt purchases.
How to Use a Resale Certificate in Mississippi
To properly claim a resale exemption in Mississippi, a business must present its valid Mississippi Sales Tax Permit or license number to the supplier at the time of purchase. Since Mississippi does not issue a separate resale certificate form, the permit itself serves this purpose.
Mississippi generally accepts out-of-state resale certificates, but vendors should consider these conditions:
- Good Faith Acceptance: Vendors must accept resale certificates in good faith. That means ensuring the certificate includes the buyer’s name, address, out-of-state permit number, a clear reason for exemption, and signature. Sellers should verify that the goods are truly being purchased for resale.
- Reciprocity: Mississippi may accept resale certificates from other states based on reciprocity. Always check with the Mississippi Department of Revenue or confirm directly with the vendor for their policy on accepting out-of-state certificates.
For details, visit the Mississippi 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: Accepted in many states, including Mississippi. To use it, the form must include your Mississippi Sales Tax Permit number. This form is issued by the Multistate Tax Commission (MTC) and is ideal for businesses purchasing in multiple states.
- Streamlined Sales Tax (SST) Certificate of Exemption: Mississippi is not a member of the Streamlined Sales Tax Governing Board. Therefore, while a Mississippi vendor might accept an SST Certificate of Exemption, they are primarily looking for a valid Mississippi Sales Tax Permit or the Uniform Sales & Use Tax Resale Certificate. You can find more information about the SST and its member states on the Streamlined Sales Tax Governing Board website.
Businesses need to verify whether Mississippi 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 Mississippi Resale Certificate
Buyer Responsibilities
If you’re using a Mississippi resale certificate (i.e., your Mississippi Sales Tax Permit), you’re responsible for ensuring it’s used only for purchases of items you intend to resell in the normal course of business. Using it for personal use, operational items, or equipment is considered misuse and can lead to serious penalties.
- Mississippi-based buyers: You must have an active Mississippi Sales Tax Permit to claim the resale exemption. Always provide a copy of your permit or permit number to the vendor at the time of purchase. Misuse of your permit to avoid paying tax on personal purchases is considered a misdemeanor and may result in fines, imprisonment, and additional penalties.
- Out-of-state buyers: Mississippi may honor out-of-state resale exemption, or in this case, provided the document includes all necessary information, such as your home state’s registration number and intent to resell the goods. However, vendors may reject certificates if resale intent is unclear or not documented properly.
Seller Responsibilities
As a vendor in Mississippi, accepting a resale certificate (or Mississippi Sales Tax Permit) means you are responsible for ensuring proper use and documentation of the exemption. 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.
- Retain records for at least 3 years: Mississippi law requires you to keep documentation of all tax-exempt sales, including permit details, for at least three years in case of audit. These documents are not submitted with your sales tax return but must be available upon request.
Frequently Asked Questions About the Mississippi Resale Certificate
Are There Penalties for Misusing a Mississippi Resale Certificate?
Yes, misusing a Mississippi resale certificate can lead to serious penalties. Under Mississippi Code § 27‑65‑85(e), false use is a misdemeanor punishable by fines up to $500 and/or 6 months in jail. Civil penalties may also include full tax owed, up to 50% in damages, and interest.
Does a Mississippi Resale Certificate Expire?
Mississippi does not issue a separate resale certificate form. Your Mississippi Sales Tax Permit functions as your resale certificate. While the permit has no fixed expiration date, it is only valid as long as it remains active and in good standing. If your permit is revoked, canceled, or becomes inactive, you can no longer make tax-exempt purchases for resale.
How Do I Verify a Resale Certificate in Mississippi?
Mississippi does not issue a separate resale certificate. Instead, the Sales Tax Permit serves as the resale authorization. As a seller, you’re responsible for verifying that the buyer’s permit is valid and active before accepting it for tax-exempt purchases.
If you’re a seller in Mississippi, here’s how to validate a buyer’s resale certificate:
- Go to the Mississippi Department of Revenue website: https://www.dor.ms.gov/
- Navigate to “Tools” in the main menu and select “Verify a Permit Number.”
- Under “Permit Type,” choose “Sales Permit.”
- Enter the buyer’s Permit ID in the appropriate field.
- Click “Search Permit” to confirm the permit is active and valid.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale certificates in Mississippi. TaxHero simplifies the process, from keeping your Mississippi 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 resale certificate in Mississippi process today!