If you run an Ecommerce or CPG business in Virginia, securing a Virginia 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 Virginia sales tax laws.
Understanding Resale Certificates in Virginia
What is a Virginia Resale Certificate?
In Virginia, a Sales and Use Tax Certificate of Exemption (Form ST-10) is a document issued by the Virginia Department of Taxation 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 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 Virginia Resale Certificate?
Obtaining a resale certificate in Virginia 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 Virginia’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 Virginia 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 Virginia’s sales tax laws and regulations to avoid penalties.
In Virginia, the specific form required for a resale certificate is the Commonwealth of Virginia Sales and Use Tax Certificate of Exemption (Form ST-10).
When filling out Form ST-10, a purchaser must include their Virginia taxpayer number to identify that it is registered with the Virginia Department of Taxation and authorized to make tax-exempt purchases for resale.
Resale Certificate vs. Sales Tax Permit: What’s the Difference?
A Virginia Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. A Virginia Resale Certificate (Form ST-10), 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, it’s best to have an active sales tax permit.
Who Can Use a Resale Certificate in Virginia?
Businesses that purchase goods for resale can use a Virginia Resale Certificate. To do so, the business must actively sell taxable tangible products and hold a valid Virginia Sales Tax Permit or an out-of-state registration number for unregistered businesses.
How to Get a Resale Certificate in Virginia: A Step-by-Step Guide
1. Make Sure You’re Eligible: Your business must sell taxable goods or services and be registered with the Virginia Department of Taxation. Businesses with a valid Virginia Sales Tax Permit can easily use a resale certificate without any additional registration steps.
2. Provide Your Out-of-State Registration Number: Unregistered businesses may still use Virginia’s official resale certificate (Form ST-10) as long as you provide the required details on the form and your out-of-state registration number, which you can get from the Virginia Department of Taxation.
3. Get a Virginia Sales Tax Permit: If you don’t already have one, apply for a Virginia Sales Tax Permit through the Virginia Department of Taxation website. This permit will make it easier for you to use the Form ST-10 without needing an out-of-state registration number and will help you stay compliant with the state of Virginia.
Need help? Read our blog: How to Get a Seller’s Permit in Virginia
4. 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 Virginia or home state sales tax permit number (if already obtained)
- Your business type (e.g., sole proprietorship, LLC, corporation).
5. Complete Form 01-339: Download and fill out the Virginia Sales and Use Tax Certificate of Exemption (Form ST-10) from the Virginia Department of Taxation’s website. You’ll present this form to your suppliers when making tax-exempt purchases.
6. Submission: No submission required in Virginia. 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 the Form ST-10. However, it’s recommended to get a valid Virginia sales tax permit for easier usage. To see if there’s a cost for the permit, check out our guide on Sales Tax Permit fees.
8. Understand Renewal Requirements: Your resale certificate remains valid only while your Sales Tax Permit is active. Fortunately, a Virginia Sales Tax Permit does not need to be renewed; however, the state can revoke it under certain circumstances. If you don’t have a permit, you must keep your out-of-state registration number valid.
How to Use a Resale Certificate in Virginia
To properly utilize your resale certificate in Virginia when making tax-exempt purchases for resale, you’ll need to present a valid copy of your Virginia Sales and Use Tax Certificate of Exemption (Form ST-10) to your supplier at the time of purchase.
In this case, even if you are not a registered seller in Virginia, you may still use its state-issued resale exemption certificate as long as you provide all the required details on the form. That’s because Virginia generally prefers its state-issued resale certificate.
Virginia can also accept resale certificates issued by other states. However, there are specific conditions:
- Match Virginia’s Form ST-10: Out-of-state resale certificates are only accepted in Virginia if they contain all the necessary information found in Virginia’s official resale certificate. Virginia vendors may not accept your state’s resale certificate if it lacks the required details.
- Good Faith Acceptance: Vendors in Virginia can 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.) and meets the first condition stated above.
If you are an out-of-state business purchasing from a vendor in Virginia and plan to use your home state’s resale certificate, be prepared to provide it at the time of purchase and ensure it meets the requirements stated above.
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 Virginia, you may visit the state’s website.
Multi-Jurisdictional Resale Certificates
A standardized multi-jurisdictional resale certificate simplifies 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 Virginia 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). Virginia may accept the form, but only if it includes your Virginia Sales Tax Permit number and contains all the information required in Virginia’s Form ST-10. Out-of-state purchasers should include their home state’s registration number. You can find this form on the Multistate Tax Commission (MTC) website.
- Streamlined Sales Tax (SST) Certificate of Exemption: Virginia is not a member of the Streamlined Sales Tax Governing Board. Therefore, a Virginia vendor cannot accept an SST Certificate of Exemption.Virginia has also confirmed that it does not allow the usage of other exemption forms outside of the state. Find more information about the SST and its member states on the Streamlined Sales Tax Governing Board website.
While Virginia accepts the Uniform Sales & Use Tax Resale Certificate (Multijurisdiction Form), it’s still up to the seller whether they’ll accept these forms in good faith or not. After all, they bear the responsibility for sales tax collection if the exemption is invalid.
Contact your Virginia supplier ahead of time to verify if they can accept these multi-jurisdictional forms. This is an important practice to avoid any audit issues.
Responsibilities When Using or Accepting a Virginia Resale Certificate
Buyer Responsibilities
You are responsible for ensuring that you use a Virginia resale certificate 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.
- Virginia-based buyers: Provide a fully completed Form ST-10 to your suppliers for qualifying purchases.
- Out-of-state buyers: Provide your out-of-state registration number when using Virginia’s Form ST-10 to properly use the resale certificate. When using your home state’s resale certificate, ensure that your out-of-state resale certificate matches all the details required in Virginia’s Form ST-10.
Virginia strictly prohibits the use of the Form ST-10 to purchase tobacco products for resale. If you are a cigarette retailer, Virginia requires you to register for a separate form called Form ST-10C first.
Seller Responsibilities
As a seller in Virginia, accepting a resale certificate comes with a variety of responsibilities. Such as verifying and retaining proper documentation for tax-exempt sales. Other than that, you must also:
- Accept the certificate in good faith
- Verify the buyer’s sales tax permit number if you have doubts. At the moment, you can only do this by contacting the Virginia Department of Taxation.
- 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). The same applies if the items intended for resale are tobacco products.
Keep detailed records of the transaction: A properly completed resale certificate is your official proof of why sales tax wasn’t collected. You must retain it in your records indefinitely. This is in case of a sales tax audit by the Virginia Department of Taxation. The same logic applies if there might be updates in the transaction.
Frequently Asked Questions About the Virginia Resale Certificate
Are There Penalties for Misusing a Virginia Resale Certificate?
Yes. Misusing a Virginia Resale Certificate results in a $1,000 penalty. It could also lead to a temporary suspension of your resale certificate. Using a suspended resale certificate leads to a Class 1 misdemeanor. Misusing a Virginia resale certificate with fraudulent intentions may lead to imprisonment or a $2,500 fine. Learn more from the Virginia Department of Taxation.
Does a Virginia Resale Certificate Expire?
The resale certificate Form ST-10 has no expiration date. However, it is only valid while your Virginia Sales Tax Permit remains active. For out-of-state businesses, you need to keep your out-of-state registration numbers active.
How Do I Verify a Resale Certificate in Virginia?
If you’re a seller in Virginia, there is only one way to validate a Virginia resale certificate (Form ST-10). Since online verification is currently not an option, you must contact the Virginia Department of Taxation at 804-367-8037 for assistance.
How TaxHero Can Help
You don’t have to complicate managing sales tax compliance and resale certificates in Virginia. TaxHero simplifies the process—from keeping your Virginia Sales Tax Permit 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 Virginia process today!