How to Buy and Sell with Florida Sales Tax Exemption Certificates
- Mar 6, 2016 | Suzanne Kearns
If you do business in the Sunshine State, it’s important that you’re aware of Florida’s sales tax exemption certificate laws. The Florida Department of Revenue has very strict rules when it comes to using and accepting their Florida Annual Resale Certificate for Sales Tax. Whether you use it to purchase goods or products for resale, or you accept them from customers, here’s what you need to know.
How to Use It to Buy Things
Any business that is registered to collect and remit sales tax in Florida is automatically issued an Annual Resale Certificate for Sales Tax at the beginning of each year, and the certificate is only good for that year. The certificate allows business owners to make tax-exempt purchases on:
- Goods that become a component of a product that you sell
- Goods that you resell as tangible personal property
- Services that are resold by your business
- Things that you rent as real or tangible personal property
If you use your certificate to purchase goods for your business, you can either present the seller with the certificate, or they will electronically verify it.
How to Accept It From Customers
If a customer wants to purchase goods from you tax-free, you are required to document each sale involving a certificate. You can choose from the following methods.
- You can accept a paper or electronic copy of the customer’s Annual Resale Certificate For Sales Tax, but you must keep the copy for a minimum of three years.
- You can get a transaction authorization number once you see the customer’s certificate. Do this by phone by calling 877-357-3725, do it online, or use the Florida Tax mobile app to get the authorization number. However you go about it, you will be asked to enter the customer’s certificate number and then keep a record of the validation response. By using one of these authorization methods, you will be immediately notified if the purchaser doesn’t have a valid certificate. If you make more than one sale to the same customer, you will need an authorization number for each individual sale.
- If you sell regularly to the same customer, you can apply at the above online site to request a batch file authorization so you can avoid filing every transaction you have with that person. The batch authorization will be sent to you within 24 hours and be good for the current year. When you do it this way, you aren’t required to maintain a copy of the customer’s exemption certificate.
Keep in mind that Florida Annual Resale Certificates for Sales expire on December 31 of every year, so always check to ensure the certificate being presented to you is current. You can automate the process to make it all a little easier.