If you run an Ecommerce or CPG business in Tennessee, securing a Tennessee Resale Certificate is a smart move to protect your margins and streamline operations.
This certificate enables you to purchase inventory and raw materials tax-free, thereby reducing upfront costs, maintaining competitive pricing, and ensuring compliance with Tennessee sales tax laws.
Understanding Resale Certificates in Tennessee
What is a Tennessee Resale Certificate?
In Tennessee, a Tennessee Sales and Use Tax Certificate of Resale, is a document issued by the Tennessee Department of Revenue 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 Tennessee 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 Tennessee Resale Certificate?
Obtaining a resale certificate in Tennessee 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 Tennessee’s sales tax upfront. Businesses must use the official Tennessee Sales and Use Tax Certificate of Resale, Form RV-F1300701, to claim this exemption.
- 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 Tennessee 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 Tennessee’s sales tax laws and regulations to avoid penalties.
In Tennessee, the specific form required for a resale certificate is the Tennessee Sales and Use Tax Certificate of Resale (Form RV-F1300701).
When filling out Form RV-F1300701, a purchaser must include their Tennessee sales tax account number to identify that they are registered with the Tennessee Department of Revenue and authorized to make tax-exempt purchases for resale.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A Tennessee Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. A Tennessee 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 Tennessee?
Businesses that purchase goods for resale can use a Tennessee Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Tennessee Sales Tax Permit
How to Get a Resale Certificate in Tennessee: A Step-by-Step Guide
1. Make Sure You’re Eligible: Your business must sell taxable goods or services in Tennessee and be registered with the Tennessee Department of Revenue. Only businesses with a valid Tennessee Sales Tax Account Number can use a resale certificate.
2. Get a Tennessee Sales Tax Permit: If you don’t already have one, you need to register for a Tennessee sales tax account through the Tennessee Taxpayer Access Point (TNTAP) provided by the Tennessee Department of Revenue. 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 Tennessee
3. Gather Your Business Information: You’ll need basic business details to complete the resale certificate, including:
- Business Identification Information (name, address, phone number, email address)
- Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Owner/Partner/Officer Information
- Business Activity Details (description of products or services sold, sales volume, date of the first sale or the expected date to start dates)
- NAICS Code
4. Complete form RV-F1300701: Download and fill out the official Tennessee Sales and Use Tax Certificate of Resale (Form RV-F1300701) directly from the Tennessee Department of Revenue website. You’ll provide this completed form to your suppliers when making tax-exempt purchases.
5. Submission: Tennessee does not require you to submit the resale certificate to the state. Instead, give the completed form directly to your suppliers when buying inventory or other resale items.
6. Pay Any Applicable Fees: There is no fee for using Form RV-F1300701 or for registering for a Tennessee sales tax permit. To determine whether your business requires this license and any associated costs, check with your local county clerk’s office or refer to the Tennessee Department of Revenue’s guidelines. In addition, to see if there’s a cost for the permit, check out our guide on Sales Tax Permit fees.
7. Understand Renewal Requirements: Tennessee resale certificates remain valid as long as your Tennessee sales tax account remains active and in good standing. If your sales tax account is closed or becomes invalid, your resale certificate becomes invalid as well. Unlike some states, Tennessee resale certificates do not expire on a set schedule, but you should provide updated certificates to suppliers if any business information changes.
How to Use a Resale Certificate in Tennessee
To properly utilize your resale certificate in Tennessee when
To properly utilize your resale certificate in Tennessee when making tax-exempt purchases for resale, you’ll need to present a valid copy of your Tennessee Sales and Use Tax Resale Certificate to your supplier at the time of purchase.
Tennessee generally does accept resale certificates issued by other states. However, there might be specific conditions:
- Good Faith Acceptance: Vendors in Tennessee should accept out-of-state resale certificates in good faith, provided the certificate includes all required information (buyer’s name, address, sales tax ID or equivalent from the issuing state, and reason for exemption). This change eliminates the old requirement that out-of-state buyers obtain a Tennessee-specific resale certificate just to make exempt purchases from Tennessee suppliers.
- Out-of-State Sellers: If you’re an out-of-state business registered for sales tax in another state, you may provide Tennessee suppliers with either:
- A resale certificate issued by your home state, or
- A Streamlined Sales and Use Tax Agreement Certificate of Exemption (SST form) that includes another state’s sales tax ID number.
- Businesses Not Registered for Sales Tax: If you’re an out-of-state business not registered for sales tax in any state, you may present a Streamlined Certificate of Exemption with any valid tax ID number from your home state, including other tax types. This provision is especially useful for businesses located in states without sales tax (e.g., Alaska, Delaware, Montana, New Hampshire, Oregon).
- Foreign Sellers: Foreign businesses can also use the SST Certificate of Exemption by providing a tax ID number issued by their home country when buying goods for resale in Tennessee.
If you are an out-of-state business purchasing from a vendor in Tennessee 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 Tennessee, 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.
There are two primary types of multi-jurisdictional resale certificates that a business operating in or selling to vendors in Tennessee might encounter:
- Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form: This widely recognized form is accepted by many states, including Tennessee, if it includes your Tennessee Sales Tax Account Number and is properly completed. Out-of-state purchasers should also include their home state’s registration number if applicable. This form is designed by the Multistate Tax Commission (MTC) website.
- Streamlined Sales Tax (SST) Certificate of Exemption: Tennessee is an associate member of the Streamlined Sales Tax Governing Board, not a full member. Because of this status, Tennessee vendors may accept a properly completed Streamlined Sales and Use Tax Agreement Certificate of Exemption, but suppliers generally still expect buyers to provide either a Tennessee Resale Certificate (Form RV-F1300701) or a valid out-of-state resale certificate. While acceptance of the SST certificate can simplify exempt purchases, buyers should confirm with each Tennessee vendor to ensure it will be accepted.
Businesses should always confirm directly with their Tennessee vendors whether they will accept multi-jurisdictional certificates and ensure certificates are filled out completely and accurately. This is essential to avoid audit issues or sales tax liabilities.
Responsibilities When Using or Accepting a Tennessee Resale Certificate
Buyer Responsibilities
If you’re using a Tennessee 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.
- Tennessee-based buyers: You must have an active Tennessee sales tax account number and include it on your resale certificate. If your business information changes (e.g., name, address), you should provide an updated certificate to your suppliers. You are required to collect and remit sales tax on all taxable sales to your customers in Tennessee.
- Out-of-state buyers: Tennessee now accepts resale certificates from buyers registered for sales tax in other states, provided you present a fully completed Uniform Sales & Use Tax Resale Certificate that includes your home state’s sales tax ID. However, if you have nexus in Tennessee, such as inventory stored in Tennessee warehouses or employees working in the state, you must register for a Tennessee sales tax account and provide a Tennessee resale certificate.
Seller Responsibilities
As a seller in Tennessee, accepting a resale certificate comes with the responsibility of verifying and retaining proper documentation for tax-exempt sales. You must:
- Accept in good faith: Only accept certificates from buyers who genuinely intend to resell the purchased items.
- Verify completeness: Ensure the certificate includes the buyer’s name, address, sales tax account number (Tennessee or out-of-state), a statement of resale intent, and the buyer’s signature (as required by the specific certificate form being used).
- Reject misuse: If the items purchased aren’t for resale (e.g., office supplies, promotional items), you must reject the certificate and collect sales tax.
- Retain records for at least 3 years: Tennessee law requires you to keep copies of resale certificates and related records for a minimum of three years to support tax-exempt sales in case of an audit.
- Update sale certificates: Tennessee’s Blanket Sales & Use Tax Certificate of Resale (Form RV-F1300701) generally remains valid for ongoing customer relationships. If you have a “recurring business relationship” (at least one sale every 12 months) with a buyer, you’re usually not required to request a new certificate. However, if a buyer’s business information changes, or if you suspect the certificate is no longer valid, you must request an updated one or verify its status via the Tennessee Taxpayer Access Point (TNTAP).
Frequently Asked Questions About the Tennessee Resale Certificate
Are There Penalties for Misusing a Tennessee Resale Certificate?
Yes. Tennessee law explicitly prohibits knowingly misusing a resale certificate. Using a certificate for purchases not intended for resale such as office supplies or equipment can trigger severe consequences:
- The Department of Revenue may revoke your sales tax registration.
- All normally exempt purchases become retroactively taxable.
- You may face fines, interest, and class C misdemeanor charges for misuse. Misusing the certificate of registration or resale certificate to evade tax obligations is a misdemeanor under Tennessee regulations. Penalties include assessments of all tax owed plus interest, and potential legal action.
Does a Tennessee Resale Certificate Expire?
The resale certificate (Form RV-F1300701) does not expire; however, it becomes invalid if the business location associated with the certificate is closed or if your Tennessee sales tax account is canceled. You should also update your resale certificate if your business information changes, such as name or address, to ensure it remains valid with your suppliers.
How Do I Verify a Resale Certificate in Tennessee?
Resale certificates can be verified online using the Tennessee Taxpayer Access Point (TNTAP) Verification Tool.
To check the validity of a certificate:
- Go to the TNTAP homepage.
- Locate the Look Up Information section.
- Select Verify a Sales & Use Tax Certificate.
- Choose Blanket Sales & Use Tax Certificate of Resale.
- Enter the buyer’s Location ID as listed on their resale certificate.
You can also call the Tennessee Department of Revenue at 615-253-0600 or email them at revenue.support@tn.gov for assistance.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale certificates in Tennessee. TaxHero simplifies the process, from keeping your Tennessee Sales Tax Permit active to ensuring you use resale certificates correctly.
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