If you’re selling into the Commonwealth, you’ve likely wondered does Virginia accept out of state resale certificates for tax-exempt purchases. It’s a critical question—and the answer isn’t as clear-cut as it might seem. For businesses operating across state lines, knowing exactly how Virginia treats resale documentation can mean the difference between compliance and costly penalties.
In this article, we’ll break down Virginia’s stance, explain when and how to use the correct certificate, and help you avoid the traps others fall into. And if managing resale certificates feels like too much, HOST is here to handle the heavy lifting for you.
Virginia’s Policy on Out-of-State Resale Certificates
Navigating resale certificate compliance in Virginia requires a clear understanding of the state’s specific policies. Virginia has particular guidelines regarding the acceptance of out-of-state resale certificates, which businesses must adhere to for tax-exempt purchases.
Acceptance Criteria
Virginia generally does not accept out-of-state resale certificates. However, in certain situations, a seller may accept a resale certificate from another state if it contains all the information required by Virginia’s Form ST-10. This includes details such as the purchaser’s name, address, type of business, and a valid sales tax registration number. The Virginia Department of Taxation has indicated that sellers may accept such certificates if they are substantially similar to Form ST-10 and are taken in good faith.
Limitations
Despite the above, it’s important to note that exemption certificates from other states are generally not acceptable for tax-exempt purchases in Virginia. Virginia requires businesses to obtain a Virginia Sales Tax Certificate of Registration and to use the state’s specific exemption certificate forms, such as Form ST-10, for resale purchases. Out-of-state businesses cannot rely solely on their home state’s resale certificate; they must comply with Virginia’s registration and documentation requirements to make tax-exempt purchases within the state.
Obtaining a Virginia Resale Certificate (Form ST-10)
To make tax-exempt purchases for resale in Virginia, businesses must secure a valid resale certificate. This process involves obtaining a Virginia Sales and Use Tax Certificate of Registration and accurately completing Form ST-10.
Prerequisite: Virginia Sales and Use Tax Certificate of Registration
Before applying for a resale certificate, businesses must register with the Virginia Department of Taxation to obtain a Sales and Use Tax Certificate of Registration. This registration provides a 15-digit sales tax account number, essential for tax collection and reporting.
Registration Steps:
- Gather Required Information:
- Federal Employer Identification Number (FEIN)
- Business legal name and address
- Responsible party’s details
- North American Industry Classification System (NAICS) code
- Register Online:
- Visit the Virginia Tax registration portal
- Select “New Business? Register your business here.”
- Complete the online application
Upon completion, you’ll receive your sales tax account number and Sales Tax Certificate of Registration (Form ST-4).
Completing Form ST-10
Form ST-10, the Sales and Use Tax Certificate of Exemption, allows registered dealers to purchase tangible personal property for resale without paying sales tax.
Key Information to Include:
- Dealer Information:
- Legal business name
- Trading name (if applicable)
- Business address
- Virginia sales tax account number
- Supplier Information:
- Name and address of the supplier
- Purchase Details:
- Indicate the purpose of the purchase (e.g., resale)
- Date of the purchase
- Signature:
- Authorized signature and title
The completed Form ST-10 should be presented to the supplier at the time of purchase and retained on file by the supplier for audit purposes.
For the official Form ST-10 and detailed instructions, refer to the Virginia Department of Taxation’s website.
Proper Usage and Record-Keeping
Ensuring compliance with Virginia’s resale certificate regulations involves not only correct usage but also meticulous record-keeping. Adhering to these practices safeguards your business against potential audits and penalties.
Usage Guidelines
- Appropriate Use: Utilize the Virginia resale certificate (Form ST-10) exclusively for purchasing tangible personal property intended for resale. Using it for personal or non-resale items, such as office supplies, is prohibited.
- Accurate Completion: Ensure that Form ST-10 is thoroughly and accurately filled out, including your business name, address, Virginia sales tax account number, and a detailed description of the items being purchased.
- Presentation to Sellers: Provide the completed Form ST-10 to your suppliers at the time of purchase to claim the sales tax exemption.
Record-Keeping
- Retention Period: Maintain all resale certificates and related transaction records for a minimum of three years from the date of the return or the date the tax was paid, whichever is later.
- Documentation: Keep comprehensive records, including invoices, purchase orders, and any correspondence related to tax-exempt purchases.
- Accessibility: Ensure that all records are organized and readily accessible for review by the Virginia Department of Taxation during standard business hours.
Verification
- Supplier Responsibility: Sellers are responsible for verifying the validity of the resale certificate presented. While Virginia does not offer an online verification system, suppliers can confirm the purchaser’s sales tax registration by contacting the Virginia Department of Taxation at (804) 367-8037.
By diligently following these guidelines, businesses can confidently navigate Virginia’s resale certificate requirements and maintain compliance with state tax laws.
How Virginia Treats Marketplace Sellers and Remote Sellers
Virginia has specific guidelines for marketplace sellers and remote sellers regarding sales tax collection, especially in light of economic nexus standards established in 2019.
Economic Nexus Thresholds
Effective July 1, 2019, Virginia requires remote sellers and marketplace facilitators to collect and remit sales tax if they meet either of the following thresholds in the previous or current calendar year:
- Over $100,000 in gross revenue from sales in Virginia
- At least 200 separate sales transactions in Virginia
These thresholds apply to both in-state and out-of-state businesses. Once the threshold is met, businesses must register with the Virginia Department of Taxation and begin collecting sales tax.
Marketplace Facilitators’ Responsibilities
A marketplace facilitator is defined as a business that contracts with sellers to facilitate sales through a physical or electronic marketplace. If a facilitator meets the economic nexus thresholds, it must:
- Register with the Virginia Department of Taxation
- Collect and remit sales tax on behalf of its marketplace sellers
- Indicate its status as a marketplace facilitator during registration
This means that individual sellers using such platforms are generally relieved from collecting sales tax on those facilitated sales.
Obligations for Marketplace Sellers
While marketplace facilitators handle tax collection for sales made through their platforms, sellers must be aware of their responsibilities:
- If a seller makes sales outside of the marketplace (e.g., through their own website) and meets the economic nexus thresholds, they must register and collect sales tax for those sales.
- Sellers should maintain records of all sales, both through marketplaces and other channels, to ensure compliance.
Understanding these distinctions is crucial for businesses operating in Virginia to ensure proper sales tax compliance.
Real Scenarios: When Virginia Requires a New Resale Certificate
Maintaining an up-to-date resale certificate is crucial for compliance with Virginia’s tax regulations. While Virginia’s Form ST-10 doesn’t have a specified expiration date, certain changes in your business operations necessitate issuing a new certificate.
Situations Requiring a New Certificate
- Business Name or Ownership Changes: If your business undergoes a name change or ownership transition, a new resale certificate reflecting the updated information is required.
- Address Changes: Relocating your business to a new address mandates the issuance of a new certificate with the current location details.
- Changes in Business Structure: Altering your business entity type (e.g., from sole proprietorship to LLC) requires a new certificate to reflect the new structure.
- Supplier Requests: Some suppliers may periodically request updated certificates to ensure compliance with their record-keeping policies.
It’s advisable to review and, if necessary, update your resale certificates annually or whenever significant changes occur in your business. Keeping accurate and current documentation helps prevent potential issues during audits and ensures uninterrupted tax-exempt purchasing privileges.
HOST: Your Full-Service Partner for Resale Compliance in Virginia
When it comes to managing resale certificates across states like Virginia, even a small oversight can lead to big compliance headaches. That’s why HOST created ResaleCertify, a service tailored to help eCommerce, wholesale, and dropshipping businesses streamline certificate generation, storage, and validation—without the chaos.
ResaleCertify: Resale Certificates Made Easy
HOST’s ResaleCertify platform simplifies the resale certificate process so you’re always audit-ready:
- Unlimited Certificate Generation: Create and download an unlimited number of resale certificates valid in all 50 states.
- Vendor-Specific Management: Easily add your vendors to the system and issue tailored certificates that meet their specific requirements.
- Blanket Certificate Support: Where permitted, issue blanket certificates to reduce redundant paperwork for frequent purchases.
- Research-Driven Accuracy: The platform is built on state-specific compliance guidelines to ensure your certificates are accepted and audit-ready.
Beyond Certificates: HOST’s Sales Tax Compliance Suite
HOST goes beyond resale documentation with a full stack of services:
- Sales Tax Registration in all 50 states
- Filing and Remittance (monthly, quarterly, or annually)
- Economic Nexus Monitoring so you’re alerted when registration thresholds are met
- Audit-Ready Recordkeeping with documentation that satisfies state regulators
Whether you’re scaling nationally or simply trying to stay compliant in Virginia, HOST helps you stay organized, accurate, and ahead of every tax deadline.
Navigate Virginia’s Resale Rules with Confidence
Virginia’s resale certificate requirements may seem straightforward, but the fine print matters—especially when you’re dealing with out-of-state sales, remote seller rules, or changes to your business structure. Using the correct forms, staying current with your documentation, and understanding the nuances of Virginia’s tax law are essential to keeping your operations compliant and audit-ready. That’s where HOST steps in. With ResaleCertify and a full suite of sales tax services, HOST handles the complexity for you. Ready to simplify compliance? Reach out for a consultation and let HOST take sales tax off your plate.
