On-the-spot sales tax exemptions for resalers
DOR replaces resale certficates with resellers' permits
Beginning January 1, 2010, resellers’ permits issued by the Washington State Department of Revenue will replace the current resale certificates. The permits give businesses such as retailers, wholesalers, and manufacturers on-the-spot exemptions from sales tax when they purchase wholesale items or services.
In September 2009, the DOR will notify active businesses, some of which will automatically receive a reseller’s permit. Businesses that don’t automatically receive the permit may apply for one. Resellers’ permits will expire after a certain time period. The length of time a permit is valid depends on when the business registered with the Department.
Businesses registered:
- before January 1, 2009, will get a permit valid for four years.
- on or after January 1, 2009, will get a permit valid for two years that can be renewed for four years.
Special rules apply to the construction industry. Resellers’ permits for qualifying contractors are only valid for 12 months.
Buyers that don’t receive Department-issued resellers’ permits will pay retail sales tax on their purchases. However, if the purchase is a qualifying wholesale transaction, they can take a “Tax Paid at Source” deduction on their tax return against retail sales reported to recover the sales tax paid, or request a refund from the Department.
More information is available here.
Related:
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