If you run an Ecommerce or CPG business in Vermont, securing a Vermont Resale Certificate is one of the smartest ways to protect your margins and streamline operations.
This certificate lets you purchase inventory and raw materials without paying sales tax, reducing your upfront costs. By lowering your expenses, you can stay competitive with your pricing while remaining fully compliant with Vermont sales tax laws.
Understanding Resale Certificates in Vermont
What is a Vermont Resale Certificate?
In Vermont, a resale certificate, formally known as the Vermont Sales Tax Exemption Certificate (Form S‑3), is used by businesses to certify to their sellers that purchases are for resale. 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.
This process prevents double taxation, first at the wholesale level and then again when the product is sold at retail.
However, a Vermont resale certificate does not exempt you from collecting sales tax. Businesses must still collect and remit sales tax on taxable sales to end customers.
Why do you need a Vermont Resale Certificate?
A Vermont resale certificate offers several important benefits:
- Avoid Paying Sales Tax on Inventory: You won’t pay sales tax upfront on items you plan to resell, improving cash flow.
- Maintain Competitive Pricing: By saving on sales tax at purchase, you can price your products more competitively, especially helpful in cost‑sensitive industries.
- Stay Compliant: Using a properly completed resale certificate ensures you follow Vermont sales tax laws and avoid penalties for improper purchases.
In Vermont, you must use Form S‑3 (Vermont Sales Tax Exemption Certificate). When completing this form, you’ll include your Vermont Sales & Use Tax Account Number to show you are registered with the Vermont Department of Taxes and authorized to make tax‑exempt purchases for resale.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A Vermont Sales Tax Permit lets your business collect and remit sales tax on taxable sales. A Vermont Resale Certificate (Form S‑3) allows you to purchase goods tax‑free when those goods are intended for resale.
To use a resale certificate, you must first obtain an active sales tax permit.
Who Can Use a Resale Certificate in Vermont?
Businesses that purchase goods for resale can use a Vermont Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Vermont Sales Tax Permit.
How to Get a Resale Certificate in Vermont: A Step-by-Step Guide
Getting a resale certificate in Vermont is straightforward, but you must 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 Vermont Department of Taxes. Only businesses with a valid Vermont Sales Tax Permit can use a resale certificate.
2. Get an Vermont Sales Tax Permit
If you don’t already have one, apply for a Sales Tax Permit through the Vermont Department of Taxes’ myVTax portal. 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 Vermont
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 Vermont (Nexus Start Date), Estimated Quarterly Sales Tax Liability in Vermont
- NAICS Code
4. Complete the Proper Certificate
Download and fill out the Vermont Sales Tax Exemption Certificate (Form S‑3) from the Department of Taxes’ website. Check whether your certificate is for a single purchase or multiple purchases (blanket certificate). You’ll provide this completed form to your suppliers when making tax‑exempt purchases for resale.
5. Provide it to Your Suppliers
You don’t submit Form S‑3 to the state. Instead, give the completed certificate directly to your suppliers when buying items for resale. Sellers must receive the form at or before the time of sale, but Vermont allows a 90‑day window after the sale to provide it if needed.
6. Pay Any Applicable Fees
There’s no cost to use Form S‑3, but you must maintain an active Vermont Sales Tax Permit. Check the Vermont Department of Taxes for any permit fees.
7. Maintain and Renew
Your resale certificate remains valid indefinitely as long as your Vermont Sales Tax Permit is active. To keep your certificate usable, renew your Sales Tax Permit when required and ensure your account remains in good standing.
How to Use a Resale Certificate in Vermont
To use a Vermont resale certificate for tax‑exempt purchases, present a valid, completed Vermont Sales Tax Exemption Certificate (Form S‑3) to your supplier at or before the time of purchase. This form serves as the seller’s proof for not charging sales tax.
Vermont places a strong emphasis on good‑faith acceptance. Sellers must ensure that the certificate:
- Has no false or misleading statements.
- Uses the official Vermont Department of Taxes form or one with substantially identical language.
- Is fully completed, signed, and dated.
- Covers items that match the stated exempt purpose.
If you’re an out‑of‑state business purchasing from a Vermont vendor, you may present your home state resale certificate, but the Vermont vendor is generally required to accept a Vermont Form S-3 or a Streamlined Sales Tax (SST) Certificate of Exemption if they are a member of SST. Always confirm the vendor’s policy before purchase.
For more information, visit the Vermont Department of Taxes Exemption Certificates page.
Multi-Jurisdictional Resale Certificates
Multi‑jurisdictional resale certificates simplify purchasing for resale across state lines. These forms are recognized by many states as valid proof of resale intent, but acceptance in Vermont depends on proper completion and vendor discretion.
The two main types you may encounter in Vermont are:
- Uniform Sales & Use Tax Resale Certificate – Multijurisdiction Form: Accepted by many states, including Vermont, if properly completed. Vermont buyers must include their Vermont Sales & Use Tax Account Number. Out‑of‑state buyers should include their home state registration number.
- Streamlined Sales Tax (SST) Certificate of Exemption: Vermont is a full member of the Streamlined Sales Tax Governing Board, so it accepts this form from qualifying buyers, and vendors are generally required to accept it from qualifying buyers, especially those registered through the Streamlined system.
Always verify with your Vermont vendor if they will accept a multi‑jurisdictional certificate. Using the wrong form or failing to provide proper details can create audit risks.
Responsibilities When Using or Accepting a Vermont Resale Certificate
Buyer Responsibilities
If you use a Vermont resale certificate, you must ensure it is applied only to purchases of goods or services intended for resale. Using the certificate for personal or operational items, such as office supplies or equipment, is illegal and can lead to penalties.
- For Vermont-based buyers: You must hold an active Vermont Sales & Use Tax Account Number and provide it on Form S‑3. Be prepared to explain the exempt purpose if the items you’re purchasing aren’t clearly for resale.
- For out‑of‑state buyers: You can use your home state resale certificate or a multi‑jurisdictional form like the MTC or SST certificate. However, acceptance is up to the Vermont vendor. Always confirm in advance and provide full details, including your home state sales tax number, to avoid rejection or disputes.
Seller Responsibilities
As a seller in Vermont, 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: Confirm that the information provided is accurate and that the items match the claimed exempt purpose.
- Ensure the certificate is complete: It must include the buyer’s name, address, tax account number (Vermont or home state), reason for exemption, signature, and date.
- Reject invalid certificates: Do not accept certificates for purchases clearly meant for personal or business use unrelated to resale.
- Retain records for at least 3 years: Vermont requires sellers to keep completed resale certificates for a minimum of three years from the date of the last sale covered by the certificate (Form S‑3 instructions). These records protect you during audits by the Vermont Department of Taxes.
Frequently Asked Questions About the Vermont Resale Certificate
Are There Penalties for Misusing a Vermont Resale Certificate?
Yes. Misusing a resale certificate for personal or non‑resale purchases can result in tax assessments, added penalties, and possible legal action. Only use Form S‑3 for legitimate resale transactions.
Does an Vermont Resale Certificate Expire?
No. Form S‑3 does not expire. It remains valid as long as your Vermont Sales and Use Tax Account is active. If your account becomes inactive or revoked, the certificate becomes invalid.
How Do I Verify a Resale Certificate in Vermont?
If you’re a seller in Vermont, here’s how to validate a buyer’s resale certificate:
- Request a completed Form S‑3 from the buyer.
- Confirm that it includes their Vermont Sales and Use Tax Account Number or their home state number if they are out of state.
- Call the Vermont Department of Taxes at 802-828-2505 to confirm the account is active.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale certificates in Vermont. TaxHero simplifies the process, from keeping your Vermont 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 Vermont process today!