Buying inventory shouldn’t mean paying sales tax twice. A Washington resale certificate lets businesses purchase goods for resale without that upfront tax hit, keeping cash flow smooth and operations lean. The state collects its share when you sell to the end customer, exactly as intended.
Hands Off Sales Tax (HOST) streamlines the entire process, from application to daily use, so you can focus on selling rather than wrestling with compliance paperwork.
Important: Which Resale Certificate Do You Need?
If you’re searching for a certificate to buy a condo or home in a homeowners association, you need a real estate resale certificate under RCW 64.90.640, not a sales tax reseller permit. That’s a completely different document with property disclosures, HOA fees, and reserve studies.
This guide covers sales tax reseller permits for businesses purchasing inventory and materials for resale. These permits exempt you from paying sales tax on wholesale purchases.
What is a Washington Resale Certificate?
Washington calls it a “Reseller Permit,” and it’s your ticket to tax-free wholesale purchases. Reseller permits are free and allow retailers, wholesalers, and qualified manufacturers to purchase items for resale without paying sales tax. According to the Washington Department of Revenue, these permits allow businesses to “purchase items or services for resale without paying retail sales tax.”
The mechanics are straightforward: skip the tax at purchase, then collect it when you sell to consumers. No premature payments. No cash trapped in tax obligations for inventory sitting on shelves.
Who Qualifies?
You’ll need a legally recognized Washington business with a valid Unified Business Identifier (UBI) number from the Washington State Department of Revenue. Contractors require a Labor and Industries license. The state wants proof you’re actually reselling goods, not just dodging taxes on personal purchases.
Legal Weight
Using a reseller permit carries serious responsibilities. According to Washington Department of Revenue regulations, “anyone found using a permit inappropriately will owe the tax due and a 50 percent penalty, even if there was no fraud intended.” Additionally, misuse may result in permit revocation. Keep detailed records. The state expects transparency, and auditors will verify your transactions match legitimate resale activity.
How to Apply for a Washington Reseller Permit
The process is free and surprisingly simple. Many businesses receive permits automatically when registering for retail sales. If yours didn’t arrive, here’s the path forward:
1. Register Your Business
Ensure you have an active Washington business license (UBI number) with all required endorsements. Contractors need their Labor & Industries license current. Sales tax registration is mandatory before applying.
2. Apply Online
The fastest route runs through the Washington Department of Revenue portal. Log into My DOR, find “Apply for a Reseller Permit,” and answer questions about your business activities. The state uses this information to determine eligibility, so accuracy matters.
3. Provide Complete Information
Detail your business type, products you’ll purchase for resale, and revenue history. New businesses estimate their resale activities. Incomplete applications get denied. Unpaid taxes will sink your application immediately.
4. Wait for Approval
According to the Washington Department of Revenue FAQ, “The Department has set a goal to process applications within 10 business days, however it may take up to 60 days to process your application.” There is no fee to obtain the permit. Reseller permits are free for qualified businesses. Your permit arrives by mail or electronically, complete with a unique number and expiration date.
5. Understand Your Permit’s Lifespan
Most permits last four years. However, you’ll receive only a two-year permit if you’re a contractor, your business is under 12 months old, you haven’t reported gross income in the last year, you’re on non-reporting status, or you’ve missed tax return deadlines.
Reading Your Permit Number: The last two digits indicate expiration year (e.g., a permit ending in “28” expires in 2028). This quick-check feature helps both you and vendors verify validity at a glance.
The Department sends renewal notices about 90 days before expiration, but renewal is your responsibility regardless. Missing the deadline means paying sales tax on purchases until you’re reinstated.
Using Your Reseller Permit Correctly
A permit is powerful, but misuse gets expensive fast. Follow these rules every single time:
What You Can Buy Tax-Free (By Industry)
Retailers:
- ✅ Inventory for resale
- ✅ Products for your store shelves
- ❌ Point-of-sale systems
- ❌ Shopping bags and packaging
- ❌ Office supplies
Manufacturers:
- ✅ Raw materials becoming part of finished products
- ✅ Ingredients for goods you’ll sell
- ❌ Factory equipment
- ❌ Maintenance supplies
- ❌ Tools (unless reselling them)
Contractors:
- ✅ Materials incorporated into construction projects
- ✅ Contract labor for retail/wholesale construction
- ❌ Tools and equipment (unless reselling/renting)
- ❌ Office supplies
- ❌ Materials for public road construction
Farmers:
- ✅ Feed, seed, seedlings
- ✅ Fertilizer and spray materials
- ✅ Products purchased for resale
Provide Documentation to Sellers
Hand suppliers a copy of your permit: paper, scan, or email all work. Sellers are legally required to verify your permit before exempting sales tax. Without documentation on file, they must charge you tax. Sellers can also verify your permit status through the state’s online Business Lookup tool.
Collect Tax from Your Customers
The reseller permit shifts tax collection, it doesn’t eliminate it. When you sell to consumers, charge Washington sales tax and remit it to the Department of Revenue. Skipping this step violates tax law, even though you purchased tax-free.
Never Share Your Permit
Permits aren’t transferable. Your friend’s business needs its own. If you sell your company, the new owner applies separately. Each business qualifies (or doesn’t) on its own merits.
Paid Tax by Mistake?
If you paid sales tax on purchases that should’ve been tax-exempt, you can either:
- Take a “Taxable Amount for Tax Paid at Source” deduction on your tax return when reporting the sale
- Request a refund directly from the Department of Revenue
The Penalty for Misuse
Washington monitors reseller permits aggressively. Buy office equipment tax-free while claiming it’s for resale? The Department will retroactively charge the unpaid tax plus a 50% penalty. Intent doesn’t matter. Unintentional misuse carries the same penalty as deliberate fraud. Your permit can be revoked, ending tax-free purchasing permanently.
Use the certificate strictly as designed. Keep meticulous records. The compliance burden is real, but the financial risk of getting it wrong is worse.
Out-of-State Buyers: Special Considerations
Washington doesn’t accept most out-of-state resale certificates. If you’re based in California, Oregon, or any other state, your home-state certificate won’t work for Washington purchases.
However, businesses not required to register in Washington can present:
- Streamlined Sales Tax (SST) Exemption Certificate
- Multistate Tax Commission (MTC) Uniform Certificate
Critical Warning: Not all Washington vendors accept these multi-state certificates. Always verify your supplier’s policy before purchasing. If your vendor refuses the certificate, you’ll pay sales tax upfront and need to claim a refund later through your home state or Washington’s refund process.
If you’re making regular purchases from Washington suppliers, registering for a Washington reseller permit is often simpler than managing certificate rejections and refund paperwork.
For Sellers: Accepting Reseller Permits Safely
If you’re a Washington business accepting resale certificates from buyers, protecting yourself requires diligent verification.
Verify Every Permit
- Use the DOR Business Lookup Tool to confirm validity
- Check the expiration date (last 2 digits of permit number = expiration year)
- Verify permit number matches the business name
- Ensure purchases align with buyer’s business type (furniture store buying furniture makes sense; furniture store buying electronics doesn’t)
Your Risk as a Seller
Accepting invalid permits exposes you to:
- Sales tax liability on those transactions
- B&O tax reclassification from wholesale to retail
- Audit penalties and interest
During audits, failure to have valid, current reseller permit documentation on file can result in the reclassification of sales from wholesaling to retailing B&O tax. You’ll owe retail sales tax for those sales.
Seller’s Rights
You have the legal right to refuse tax-exempt sales if you believe the customer is misusing their reseller permit, isn’t actually reselling the items, or the permit is expired or invalid. Protecting your business sometimes means saying no.
Best Practice: Verify permits at least annually, even for regular customers. Permits expire, businesses close, and circumstances change.
How HOST Simplifies Washington Resale Compliance
Navigating permits, renewals, vendor verification, and proper usage gets complicated fast. Hands Off Sales Tax (HOST) removes that complexity entirely.
ResaleCertify Platform: Sign up, add your business information, and download dynamically generated resale certificates tailored to your needs. No templates. No guesswork. Automatic updates when regulations change.
Audit Protection: HOST maintains organized, audit-ready records of your resale certificates. If the state comes knocking, HOST provides expert support to verify certificate validity and defend against liabilities.
End-to-End Tax Management: Beyond resale certificates, HOST offers nexus determination, exemption certificate management, sales tax filing and remittance, and audit defense. It’s comprehensive coverage so you can focus on growth instead of compliance minutiae.
Take Control of Your Sales Tax Compliance
A Washington resale certificate is essential for businesses purchasing goods for resale. Understanding eligibility, navigating the application, and using the permit correctly keeps you compliant and cash flow healthy. Accurate records and proper usage prevent costly penalties and audits.
For businesses wanting to eliminate compliance stress entirely, Hands Off Sales Tax (HOST) delivers turnkey solutions from registration through audit defense. Reach out today for a consultation and take control of your sales tax obligations with confidence.
Frequently Asked Questions
What is a Washington resale certificate?
Washington’s “Reseller Permit” allows businesses to purchase goods for resale without paying sales tax upfront. Tax obligation transfers to the end consumer when you make the retail sale.
Is this the same as a condo resale certificate?
No. Real estate resale certificates (RCW 64.90.640) are completely different documents for property buyers in HOAs or condominiums. This article covers sales tax reseller permits for businesses buying inventory.
How long does it take to get a Washington reseller permit?
The Department processes applications within 10 business days typically, though it may take up to 60 days. There’s no application fee.
How long is a Washington reseller permit valid?
Generally four years. Contractors, businesses under 12 months old, non-reporters, those on non-reporting status, or businesses that missed tax filings receive only two-year permits.
What happens if I misuse my Washington reseller permit?
Misuse triggers the unpaid tax plus a 50% penalty even for unintentional violations. Your permit may be revoked, ending tax-free purchasing privileges.
Can I use an out-of-state resale certificate in Washington?
Generally no. Washington doesn’t accept most out-of-state certificates. Limited exceptions exist for Streamlined Sales Tax (SST) or Multistate Tax Commission (MTC) certificates, but many Washington vendors won’t accept these either. When in doubt, get a Washington-specific permit.
Do I collect sales tax when reselling items purchased with a reseller permit?
Yes. Your permit exempts wholesale purchases only. When you resell to consumers, you must charge Washington sales tax and remit it to the Department of Revenue.
How do sellers verify my reseller permit?
Sellers use the Washington Department of Revenue’s Business Lookup Tool to verify your permit number, check expiration dates, and confirm your business is registered and in good standing.
What can I buy tax-free with a reseller permit?
Only items you’ll resell in the regular course of business: inventory, raw materials for manufacturing, ingredients for products you’ll sell. You cannot use it for equipment, supplies, tools (unless reselling them), or personal purchases.
