Whether you are a physical or online merchant in Florida, paying taxes is not a good experience. Even though the state has several pro-business policies and a low tax profile, business owners must pay sales taxes on goods bought for resales.
Is it possible to avoid sales taxes as a reseller? Read on to find out what a resale certificate is and how you can use it to save on taxes.
What is a Resale Certificate in Florida? – In Layman’s Terms
Florida law states that each sale, admission, storage, or rental in Florida is taxable unless the transaction is exempt. Accordingly, sales tax is added to the price of taxable goods or services and then collected from the purchaser when the sale occurs.
In simple terms, a resale certificate is a state-issued document that allows you to buy items wholesale and not pay taxes. When you buy goods from a wholesale without a resale certificate, you are responsible for paying sales taxes.
With a resale certificate, you can circumvent this unpleasant tax burden. All you need to do is to present the document to the supplier or wholesaler and you will avoid being charged with sales taxes.
In addition to a significant increase in profit, a resale certificate also helps you to enjoy tax savings. Obtaining a resale certificate incurs no costs, as there are no fees involved in the process.
This way, the ultimate buyer is responsible for paying taxes on goods sold by the reseller. The remittance process is made when the reseller files the quarterly sales returns with the Florida Department of Revenue.
Applying for a Resale Certificate in Florida – Understanding the Process
Applying for a resale certificate is not a complex task. The first step is to visit the official website of the Florida Department of Revenue (floridarevenue.com). Once you are on the homepage, click on the “General Tax” tab.
Find the “Registering a Business” section and click on “Account Registration.” After the registration page shows up, you must click on the ” Florida Business Tax Application” hyperlink to open a new window.
You will be redirected to the “Florida Business Tax Application” portal, where you must register by creating a username, valid email address, and password. Please note that the website requires new users to confirm their email accounts.
Once you are properly logged in, you can click on “Start New Application.” If you do not want to go through an online application, you can download Form DR-1 (Florida Business Tax Application), fill out the document, and submit it to the Department of Revenue by mail.
The information required in the application includes the full business name, the company’s address, the Employment Identification Number (EIN), the reason for exemption, and a statement that the ultimate purchaser is responsible for remitting the consumer’s use tax.
The applicant’s signature is no longer a requirement. If you continue to resell goods for profit and remain registered to collect sales tax, you will receive a new Annual Resale Certificate each year.
Does Florida Require a Resale Certificate? – Immediately Contact Jurado & Associates, P.A.
An expert business lawyer from Jurado & Associates, P.A. is willing to help your business succeed in Florida. Contact us by calling (305) 921-0976 or emailing Romy@juradolawfirm.com to schedule a consultation.